Group Five creditors give business rescue plans a thumbs-up
Group Five Limited and Group Five Construction creditors on Wednesday overwhelmingly voted in favour of the business rescue plans for the two companies.
The adoption of the plans will lead to Group Five Limited’s winding down and delisting from the JSE.
In March, business rescue practitioners Dave Lake and Peter van den Steen began separate business rescue processes at Group Five Limited and Group Five Construction.
In a plan for Group Five Limited published on August 30, Van den Steen and Lake said returning the company to solvency would not be possible without injection of new equity capital.
Group Five Limited on Wednesday said 100% of creditors voted in favour of the rescue plan, a move that paves the way for the practitioners to complete the disposal of its other subsidiary Everite, which manufactures building materials.
“The only asset that will realise proceeds for Group Five Limited is that of Everite. This business is now being disposed of in a controlled sales process,” Group Five Limited said.
It said at the completion of the rescue process, its creditors were likely to get distributions of 39c-50c. But its shareholders were not likely to walk away empty-handed.
At Group Five Construction, 96.1% of shareholders voted in favour of the firm’s rescue plan.
“We are extremely pleased that independent parties gave us such an overwhelmingly positive vote of confidence. We have worked extremely hard over the last few months to find the best way forward for all stakeholders,” Lake and Van den Steen said.
Group Five Construction said a business rescue process was a better option than liquidation. “Through the restructuring and sale of businesses the (business rescue practitioners) expect that between 3,000 to 3,500 jobs will be saved under new ownership,” it said.
Its creditors were likely to receive distributions of 66c-78c.
Independent chairperson of a committee of creditors, Haroon Laher of law firm Fasken on Wednesday said he had considered the company’s circumstances, the alternatives available and the potential of a liquidation, “as well as the urgency to preserve contracts and jobs and allow the group to continue contributing to an already strained South African economy”.
“I have no doubt that the current business rescue process and business plan have been the best course of action and unreservedly recommended to creditors ahead of the vote that the published business rescue plan was adopted.”