Share place­ment dis­cus­sions end

The Star Early Edition - - COMPANIES - – Roy Cokayne

BASIL Read has ter­mi­nated year-long dis­cus­sions about a po­ten­tial pri­vate place­ment of shares that would have re­sulted in the listed con­struc­tion group be­com­ing a black-owned com­pany. The com­pany con­firmed this on Fri­day, but did not pro­vide any fur­ther de­tails or rea­sons for the ter­mi­na­tion of the dis­cus­sions. Basil Read first is­sued a cau­tion­ary an­nounce­ment about the pos­si­ble share place­ment in July last year. The Black Busi­ness Coun­cil in the Built En­vi­ron­ment (BBCBE) in March launched an ag­gres­sive at­tack on planned and pend­ing transformation trans­ac­tions in the con­struc­tion sec­tor, flow­ing from the set­tle­ment agree­ment reached be­tween the gov­ern­ment and seven listed con­struc­tion com­pa­nies. It claimed Basil Read re­mained “unco-op­er­a­tive and re­cal­ci­trant”, and let­ters writ­ten to then chief ex­ec­u­tive Neville Ni­co­lau had not been ac­knowl­edged. Basil Read dis­missed these claims, adding it had in­di­cated to the BBCBE its will­ing­ness to en­gage. The com­pany re­ported in May that Ni­co­lau had re­signed from his po­si­tions at the group with im­me­di­ate ef­fect for per­sonal rea­sons. Ni­co­lau’s res­ig­na­tion co­in­cided with Basil Read re­port­ing a more than a 100 per­cent de­crease in head­line earn­ings a share to 48.92 cents for the six months to June, com­pared to the prior cor­re­spond­ing pe­riod. The group added that its board had de­cided to re­view the busi­ness with a view to un­der­tak­ing sig­nif­i­cant re­struc­tur­ing to pre­serve share­holder value and had en­gaged the ser­vices of a cor­po­rate fi­nance ad­vi­sory firm to as­sist the group in this process. In March this year, Ni­co­lau ex­pressed con­fi­dence in the group, con­clud­ing a deal that would re­sult in the com­pany be­com­ing 51 per­cent black owned. Basil Read was then al­ready 18 per­cent black con­trolled. Ni­co­lau stressed Basil Read did not want a pas­sive black eco­nomic em­pow­er­ment part­ner but for the new black share­hold­ers to be in­volved in ac­tive man­age­ment at all lev­els of the busi­ness. Shares in Basil Read rose 3.8 per­cent to close at 82c on the JSE on Fri­day.

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