Group Five’s Everite business potentially sold, G5 Construction business rescue ongoing

Posted on 20th Aug 2020

Article by: SIMONE LIEDTKE

The sale process for embattled construction company Group Five’s Everite business is on track, with the business rescue practitioners (BRPs) on August 19 confirming receipt of a “credible and funded offer” that is being pursued.

This follows as the sale process was temporarily suspended during the initial national lockdown period in efforts to curb the spread of Covid-19 in South Africa.

In a monthly update by the BRPs for July, they also confirmed that the delisting process from the JSE was now complete, and that Group Five was no longer listed on the stock exchange.

Meanwhile, the legally separate business rescue process for Group Five (G5) Construction is ongoing and broadly in accordance with the business rescue plan. However, the BRPs lamented a delay in the disposal implementation processes and, therefore, cash realisation.

The majority of the assets and businesses for sale have either been realised or are the subject of the binding sale of G5 Construction agreements which are progressing, albeit slowly.

The sale of Intertoll Europe, the company’s largest asset, was completed during July.

The bulk of the sale proceeds have been received and subsequently distributed to the secured creditors holding security over the asset.

A portion of the sales proceeds are deferred and will be settled at a later date, and until such time as these sale proceeds are received, the BRPs said that a contingent liability exists over this portion of the sales proceeds in terms of a warranty provided in the sales agreement.

The warranty is normal for a transaction of this nature and the BRPs, at this time, have no reason to believe that any claim will be made in terms of the warranty.

Currently, the cash position of the company is stable, but the BRPs lamented the impact of Covid-19 on the company’s cash flows, which, so far, remains negative – both in terms of project-related cash flows and as a result of Covid-19-related delays in completing sales transactions.

In terms of the ongoing litigation against the BRPs, the practitioners’ attorneys have filed a notice to oppose the application on behalf of the BRPs and the company, and the matter is ongoing.