Group Five’s chair resigns amid business rescue process
Group Five, which was put into business rescue earlier in 2019 after lenders pulled the plug on the struggling construction company, says chair Nonyameko Mandindi has resigned along with three other non-executive directors.
Once a stalwart of SA’s construction industry, Group Five said last week that shareholders are unlikely to get anything out of its business rescue process, a legal framework aimed at rehabilitating financially distressed companies.
Mandindi, former CEO Michael Upton, Edward Williams and Cora Fernandez had all resigned from the board with immediate effect, the contractor said on Tuesday.
“The board wishes to thank Nonyameko, Michael, Edward and Cora for their invaluable contribution to the group since their appointments in July 2017 under challenging circumstances, and takes this opportunity to wish them well for their future,” the company said.
According to a presentation posted on the company’s website last week, Group Five’s losses have been steadily growing. It made a total loss of R1.8bn in the eight months to end-February. In the year to end-June 2018, it made a loss of R1.3bn, while in 2017, its losses amounted to about R800m.
The business rescue practitioners said in the presentation “there is a reasonable prospect of achieving a successful business rescue and to provide value to creditors.
“However, given that it is highly unlikely that all creditors will be made whole, it is expected that no value will flow to shareholders through the business rescue process.”
At the end of February, Group Five’s liabilities exceeded its assets by R1.3bn.