South Africa’s investments and concessions company, Group Five has said it will start offloading some of its assets to remain a going concern following its recent filing for business rescue to rehabilitate financially its distressed companies due to the unwillingness of lenders to grant the firm more funding.
The Nerve Africa earlier reported that the construction and engineering company has sold its manufacturing assets, Everite and Sky Sands, to a consortium for R480 million ($34.74 million) in January this year. Last month, it filed for business rescue and its listing on the JSE was suspended at 89cents a share. Barely a month later, the company has noted that it is planning to sell more assets.
According to the company’s business rescue practitioners, Peter van Steen and Dave Lake, Group Five remained financially distressed, with liabilities that materially outweighed its current assets. However, “the imbalance is being addressed through a moratorium on pre-business rescue creditors funding to be provided by a consortium of lenders once the business rescue plan was initiated, negotiations with counterparties, and the disposal of a number of different assets to a multiple of a potential arm’s-length purchasers,” both noted.