Brikor in bid for business res­cue

Con­struc­tion ma­te­ri­als firm works with NUM to find so­lu­tion

The Star Early Edition - - COMPANIES - Roy Cokayne

BRIKOR, the listed man­u­fac­turer and sup­plier of build­ing and con­struc­tion ma­te­ri­als placed in provisional liq­ui­da­tion in Au­gust last year, claims it is fi­nan­cially dis­tressed but trad­ing prof­itabil­ity and has ap­plied to be placed un­der business res­cue.

Both Gar­nett Van Niek­erk Parkin, the ma­jor share­holder of Brikor with a 53.3 per­cent stake in the company and chief ex­ec­u­tive at the time of the company’s provisional liq­ui­da­tion, and the Na­tional Union of Minework­ers (NUM) have ap­plied for Brikor to be placed un­der su­per­vi­sion to com­mence business res­cue pro­ceed­ings.

NUM said the mo­ti­va­tion for its ap­pli­ca­tion was to try and save its mem­bers’ jobs and pre­vent the knock-on ef­fects a liq­ui­da­tion would have on com­mu­ni­ties in the East Rand where high lev­els of un­em­ploy­ment were preva­lent.

The 345 NUM mem­bers em­ployed by Brikor con­sti­tute almost 60 per­cent of the to­tal num­ber of em­ploy­ees.

Parkin said Brikor was fi­nan­cially dis­tressed and it ap­peared rea­son­ably un­likely it would be able to pay all of its debts as they be­came due and payable within the next six months.

But Parkin said there was a rea­son­able prospect of res­cu­ing the company and for it to con­tinue to ex­ist on a sol­vent ba­sis.

He said this was based on the fact the company was trad- ing prof­itably and had made a profit of R13.2 mil­lion for the six months to Oc­to­ber this year and it had cash cur­rently of R62.3m after re­pay­ing the R22.45m over­draft fa­cil­ity that FirstRand de­manded re­pay­ment of in De­cem­ber 2012, and the R3.64m costs of the liq­uida­tors’ agents.

In ad­di­tion, Brikor’s as­sets ex­ceeded its li­a­bil­i­ties, it had a sta­ble work­force that sup­ported the grant­ing of a business res­cue or­der; its prospects for the next six months were good and the company would con­tinue to make prof­its; and if a business res­cue or­der was granted, the company would re­ceive a R40m cash in­jec­tion from Parkin that would be used to meet cred­i­tors’ claims and op­er­at­ing ex­penses, he said.

NUM said there was a rea­son­able prospect of res­cu­ing the company be­cause it had con­tin­ued trad­ing since be­ing pro­vi­sion­ally wound up and had re­turned to prof­itabil­ity.

Due to im­proved trad­ing con­di­tions, the company had man­aged to achieve gross profit mar­gins of 28 per­cent.

The union added Brikor’s man­age­ment had pre­pared a five-year fore­cast that would main­tain pos­i­tive an­nual cash bal­ances for most of the fore­cast pe­riod un­til Fe­bru­ary 2017; re­pay the FirstRand Bank in full by Fe­bru­ary 2017; and re­turn to a pos­i­tive cash bal­ance by Fe­bru­ary 2018 and main­tain that un­til Fe­bru­ary 2019.

Trad­ing in Brikor’s shares on the JSE was sus­pended in Au­gust last year.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.