BASIL READ’S BUSINESS RESCUE ON TRACK

JSE-listed construction company Basil Read on
Friday announced that the implementation of its business rescue plan was
progressing well.

From February to May, the company continued to complete three contracts,
while five contracts were in the process of being descoped or ceded to other
contractors. Another three contracts had been handed over to clients and the
company was engaged in a defects remediation process.

“The performance guarantees had been reduced from R1.1-billion at the
outset of the business rescue proceedings to about
R744-million. Negotiations with various employers were ongoing to ensure that
no further calls on guarantees were made,” said Basil Read in a release, adding
that this significantly reduced the contingent liability risk on the business.

Meanwhile, Basil Read continued to pursue a number of contractual claims
that amounted to more than R200-million. In the year to date, claims totalling
R34-million were settled and the company used those proceeds towards the
repayments of post commencement finance (PCF).

With the exception of the employees required to assist with the
completion of the contracts, which includes some contracts at Eskom’s
Medupi power station, and the remaining staff at
head office, all other employees had been retrenched and would receive their
full retrenchment packages.

The company continued to sell, through auctions, all surplus plant
and equipment. The proceeds of these sales
would be used to repay PCF, retrenchment and other business-rescue-related costs.

Basil Read has moved to new premises in Bedfordview and vacated the
Basil Read Campus to substantially reduce the costs for the company and its
continuing business.

The business rescue practitioners
(BRPs) continued to pursue expressions of interest from a number of parties for
the remaining noncore assets.

With respect to the mining and development businesses, the BRPs
had, in turn, appointed an independent sales adviser to value the business and to adjudicate on
any potential offers received. This process was ongoing.

The BRPs believe full implementation of the rescue plan will achieve a
better result than liquidation.

Basil Read entered into voluntary business rescue in June last year, mainly owing to lossmaking legacy contracts and lossmaking entities. https://www.engineeringnews.co.za/article/basil-reads-business-rescue-on-track-2019-06-28