Esor’s share price plunges 63% as it files for business rescue
The loss-making construction group was forced to make the move as it failed in its numerous efforts to secure loans to pay back the R130m owed to creditors
JSE-listed construction group Esor filed for business rescue on Monday, echoing a statement Basil Read issued in June when it also announced it was going into business rescue.
Esor’s share price fell 63% to 3c from 8c following the announcement. Listed companies are usually suspended shortly after they file for business rescue.
Esor said its construction subsidiary owed about R130m to creditors, and was unable to secure short or medium-term funding.
In June, Esor reported a net loss of R307m for the year to end-February, following a R140m loss in its 2017 financial year.
Esor listed nine steps it had taken to avoid business rescue.
These included completing loss-making contracts, selling various subsidiaries and refinancing equipment loans.
"Despite the above, Esor Construction was advised on August 7 that a consortium of financiers with whom it had been negotiating with, were not prepared to make any funding available outside of a formal business rescue process," Monday’s statement said.