BASIL READ MAKES PROGRESS IN MEETING BUSINESS RESCUE PLAN OBJECTIVES

As at the end of September, construction
engineering company Basil Read has made significant progress in meeting key
objectives of the business rescue plan, the embattled company reported on
Tuesday.

A key objective of the business rescue, it said,
was to facilitate the completion of loss-making construction contracts, which
would minimise the risk of the performance guarantees being called and further
burdening the balance sheet.

In this regard, the contingent liability of these
guarantees had been reduced from more than R1.1-billion to R575-million, the
company noted.

Over the June to September period, eleven of the
company’s contracts were completed, with another five contracts terminated by
the employers or joint venture partners. However, only two of those resulted in
performance guarantees being called.

Additionally, over this period, Basil Read
cancelled two contracts, reducing the number of projects the company has yet to
complete, to two.

Further, the other objective of the business rescue
plan was to maximise the value of construction claims. In this regard, the
company on Tuesday said the business rescue practitioners had reported that the
process was “time consuming, tedious and costly”.

They have, however, noted significant positive
victories, particularly in the Trans-Caledon Tunnel Authority and Transnet
contracts.

In these two instances, the Dispute Adjudication
Board ruled in favour of the company for a number of claims and reversal of
negative certificates. In this respect, Basil Read on Tuesday said it continued
to pursue the other outstanding claims, which it said was “substantial”.

The success in the recovery of these claims would
impact materially on the end result of the business rescue process, the company
advised.

Additionally, the sale of the noncore assets
remains an objective of the business rescue plan, the company reiterated.

Further, the retained businesses, being the Mining
and Development businesses, which are not in business rescue, continue to
perform well and remain self-sustaining, the company said.

The business rescue practitioners have appointed an
independent sales adviser to value the Mining business and adjudicate on
potential offers for the business.

Basil Read Holdings also confirmed that the implementation of the business rescue plan will continue, although the effect at a group level remains uncertain until it is completed. Therefore, the company has indicated that the suspension will remain in place until the implementation is complete and the effects on the group can be determined.  http://www.engineeringnews.co.za/article/basil-read-makes-progress-in-meeting-business-rescue-plan-objectives-2019-10-08/rep_id:4136