Share placement discussions end
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.