Basil Read to proceed with business rescue plan

JSE-listed construction group Basil Read’s business rescue plan was approved by 99% of creditors and 98% of independent creditors during a shareholder’s meeting on Thursday. Basil Read entered into voluntary business rescue in June and its business rescue plan was published in August.

In March, Basil Read reported a net loss after tax of R1-billion for the year ended December 31, as a result of a number of lossmaking legacy contracts, the write-off of goodwill in the roads division and the reversal of deferred tax assets in lossmaking entities.

At year-end, the group’s current liabilities, at R2.1-billion, exceeded current assets, at R1.4-billion, and the group’s cash had decreased to R126.4-million.

The company’s appointed business rescue practitioners, Siviwe Dongwana and John Lightfoot, believe Basil Read’s construction division can be successfully turned around, with an improvement in cash flow anticipated by the end of a two-year period in which the company will complete 17 construction contracts.

It will invest R265-million in funding it has secured to complete those contracts.