Pictures: SUNDAY TIMES
Pictures: SUNDAY TIMES

Construction company Stefanutti Stocks, which, like its peers, has been grappling with liquidity issues amid a dearth of infrastructure projects, says it has secured R120m in project financing as part of a broader fundraising effort.

The group, whose market value has dwindled to just R109m, said in May it might have to issue new shares after its cash balances decreased partly because of delayed payments from clients. Its cash balance fell to R881m at the end of February, from R916m a year earlier.

The company said on Friday it was responding to “short-term liquidity pressure” and the ring-fenced project funding was the first component of its wider plan.

SA’s construction industry is in a dire state owing to a lack of work, meager economic growth and slow payments from clients.

In March, industry stalwart Group Five filed for business rescue – a process aimed at rehabilitating financially distressed companies – after lenders decided against giving it more funding. Basil Read and Esor are also in business rescue.

Stefanutti said other projects “are being evaluated to raise additional ring-fenced project funding”.

“The remaining aspects of the funding plan are also being separately pursued in the manner envisaged in the funding plan, and shareholders will be advised accordingly.”

The group also said it was pursuing contractual claims.

Its order book at the end of June was R12.6bn, from R11.5bn at the end of February.

hedleyn@businesslive.co.za