Banks throw Group Five a bridging credit loan lifeline
Relief obtained to tackle short-term funding needs and complete power project in Ghana
Group Five, which has experienced an exodus of executives amid awful results, has secured R650m in bridging loans and secured a creditors standstill agreement to give it a breather. This enables the JSE-listed infrastructure company to keep its head above water after reporting severe losses from the $420m gas-and oil-fired Kpone power project in Ghana. Headline earnings per share plummeted 151% in the six months to December 2017 in dismal construction markets. The company remained ungeared in this time. "The R650m secured bridge funding is for a 12-month period and was obtained from a consortium of local banks," Group Five said on Wednesday. The agreement pledges cession of its manufacturing assets and its European service concessions investments and operations and maintenance businesses, by way of security. It said the funding was to rectify the mismatch between the short-term funding needs of the group, mainly due to a declining South African construction order book, as well as ca...
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