Sale of Stefanutti division fails
Loss-making construction and engineering company Stefanutti Stocks says the proposed R80m sale of its mining services division has fallen through due to a failure to meet the conditions. The proposed sale was part of a restructuring plan that could involve raising money through issuing new shares.
Loss-making construction and engineering company Stefanutti Stocks says the proposed R80m sale of its mining services division has fallen through due to a failure to meet all the conditions.
These had not been fulfilled, or waived, the group said in a statement, and the proposed sale is part of a restructuring plan that could involve raising money through issuing new shares.
Valued at only R85m on the JSE, Stefanutti incurred a net loss of R290m for the year ended February, when the group’s current liabilities exceeded its current assets by R1.36bn.
Like its peers, Stefanutti Stocks has been ensnared in the low-growth environment in SA, where there has been a dearth of large infrastructure projects over the past decade.
It is one of the few construction stocks still listed on the JSE, after Esor and Group Five joined the list of players that have exited the local share market.
Stefanutti Stocks said in April it would sell its mining services division to privately owned Akhona Mining Services for R80m as part of the restructuring through which it aims to secure its future.
The fallout of Covid-19 has added to the company’s woes, coming while it was struggling to collect money from some of its clients for services rendered.
These include Eskom and the Zambian government, with the company engaged in a battle with Eskom over contracts at the troubled Kusile power station project.
An Eskom report in 2020 claimed a R1bn overpayment to a Stefanutti Stocks-Basil Read joint venture, something that Stefanutti disputes.
The group said in its results for its 2021 year that the resolution of contractual claims and compensation events on the Kusile power project was taking longer than anticipated.