Group Five files for business rescue
Group Five has announced it has filed for business rescue because lenders have not been willing to give it more funding. A BusinessLIVE report notes the contractor – which was given bridge funding worth R650m from a consortium of lenders in April 2018 – said its financial constraints had worsened after lenders called on guarantees relating to its disastrous Kpone power-plant project in Ghana.
The group is now retrenching staff and will probably have to fork out ‘a significant amount of severance pay’. The consortium of lenders declined its request for more bridge funding last week, it said.
Group Five is now in ‘financial distress’ as it is unlikely to be able to pay all of its debts when they fall due within the next six months.
It said it has resolved to appoint David Lake and Peter van den Steen, of Metis Corporate Advisory, as business rescue practitioners for both Group Five and subsidiary G5 Construction.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
