Rescue possible for Basil Read
PLAN INCLUDES FULFILLING CONTRACTS Separate entities in mining and development are successful and selfsustaining.
After engagement with funders, guarantors, creditors, employees and management, the business rescue practitioners (BRP) appointed to manage the embattled construction subsidiary of listed Basil Read Holdings is convinced the business can be rescued.
This was the message appointed BRP Matuson & Associates gave to creditors and employees of Basil Read Limited at their first meeting.
Basil Read Limited was placed under business rescue on June 15, since it was unable to find bridging finance necessary to alleviate pressure on cash flow while the company completed construction projects, worked on selling noncore assets and implemented a turnaround strategy.
On June 20, trading in Basil Read Holdings’ shares was suspended. Trading has not yet resumed.
The BRP told the recent meetings of employees and creditors that the business rescue plan will be published on July 20 and stakeholders will vote on its adoption on August 3.
The BRP explained the roads, civils and buildings divisions, the construction plant business and the first phase of the St Helena Airport Project (Shap) would be affected. Shap Phase 2 is not affected.
The BRP further told stakeholders: “Mining and developments which are housed in separate legal entities are successful, self-sustaining and have, to date, partially subsidised the company’s construction business.”
According to unaudited statements provided to the BRP by Basil Read management, the company had R3.9 billion in assets by April this year.
This includes about R500 million in work in progress, almost a billion rand in trade and other receivables and R1.7 billion in loans to group companies.
The company’s liabilities amount to R4.6 billion.
The BRP says the proposed business rescue plan will include completing existing contracts where possible.
Securing finance post the commencement of business rescue is one of the critical success factors.
Matuson & Associates states: “It is the opinion of the BRPs that ... there is a reasonable prospect of a successful business rescue”.