GROUP FIVE CREDITORS FAVOUR BUSINESS RESCUE

CREDITORS had voted overwhelmingly in favour of the business rescue plans of Group Five Limited and Group Five Construction, a statement from the business rescue practitioners said yesterday. Some 96.1 percent of the creditors of Group Five Construction and 100 percent of creditors of Group Five Limited voted in favour of the plans. Group Five Construction represents the majority of the businesses, claims and recovery value within the greater group of companies. As outlined in the business plan, creditors would be about R5 billion better off than would be the case in a liquidation. Through the restructuring and sale of businesses, the business rescue practitioners anticipate that between 3 000 and 3 500 jobs will be saved under new ownership. Independent chairperson of the committee of creditors, Haroon Laher of Fasken, said he had no doubt that the business rescue process and business plans had been the best course of action. This was the first time in a business rescue process in South Africa that an independent creditor committee chairperson was appointed by a committee representing the creditors. This process was also supplemented with a report by PwC outlining the scenario for creditors if the company were to have been placed in liquidation. On implementation of the business rescue plans, creditors, in aggregate, were expected to receive between 66 cents and 78c in the rand – relative to 18c estimated in liquidation. Concurrent creditors were expected to receive 9c to 20c in the rand, relative to 3.4c estimated in liquidation. For Group Five Limited, no recovery would be realised from the business rescue of its main subsidiary, Group Five Construction.