has said it is conducting retrenchment proceedings and has estimated it will need to pay out R233m in severance pay as it enters business rescue. The construction and engineering group also confirmed on Thursday in a note to shareholders that it has received confirmation from the Companies and Intellectual Property Commission of the registration of the resolutions placing it and G5 Construction into business rescue.
Group Five Construction, is a wholly owned subsidiary of Group Five, is facing a cash shortfall of R2.39bn. It said in an update to shareholders that the CIPC had confirmed the interim appointment of David Lake and Peter van den Steen of Metis Corporate Advisory as business rescue practitioners.The boards of the two companies passed a resolution on Monday, March 11, in Sandton, laying out the financial position of the two companies.
It said that G5 Construction was"financially distressed and it is reasonably unlikely that G5 Construction will be able to pay all of its debts". G5 Construction experienced negative cash flows of R880m in 2018, said the board, and would need R3.6bn to fund its working capital requirements up to December 2019.
It said the construction company was not able to itself generate such working capital or raise it from other Group 5 companies or third parties.
Fin24 Business Rescue == Tax payers have to pay for it
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