Troubled Stefanutti secures more funding
The construction and engineering firm is developing a restructuring plan
Listed construction and engineering firm Stefanutti Stocks, which is in urgent need of funds to alleviate liquidity problems, said on Thursday its lenders had provided it with R227.5m.
That represents the third tranche of funding for the struggling company after the R391m it received in November. In July, Stefanutti received R120m in ring-fenced project money from its funders.
The funding raised so far dwarfs Stefanutti’s market capitalisation of R20.7m. As at August 31, Stefanutti’s total assets amounted to R6.2bn, while its order book stood at R11.2bn.
Stefanutti, which has a presence in SA and sub-Saharan Africa, is raising the funds to ease its liquidity problems. Like many other construction firms, it has struggled amid a dearth of investment in infrastructure.
The company, whose funding requirements increased to almost R1bn earlier this year mainly due to non-payment by clients, said it is still in discussions with lenders to secure additional funding and is exploring longer-term funding.
In November, Stefanutti said it had appointed a team to develop a restructuring plan. That plan, which the company said will be completed in the next few months, will entail an assessment of the sale of noncore assets, including divisions and subsidiaries, and a possible rights offer. The team is also responsible for raising additional cash.
As at February 28, the company’s debt was R637m, down from R783m in 2018.
The Kempton Park-based company, which has been listed on the JSE since 2007, was in November named in a Daily Maverick article among the companies that paid Eskom executives R75m to secure contracts at the Kusile power station in Mpumalanga.
The company said in a statement after publication of the article that it was co-operating with the Special Investigation Unit (SIU). It denied it had made payments to little-known Babinatlou Business Services “for any illicit purposes involving any Eskom executives”.
According to the publication, Babinatlou was allegedly used as a slush fund to channel cash to former Eskom executives.
Stefanutti’s share price was unchanged at 11c on Thursday. The stock is down 96.86% since the beginning of 2019. It has lost more than 99% of its value since its August 2007 debut on the JSE.