JOHANNESBURG, April 12 (Reuters) - South African builder Group Five said on Friday it would dispose of some assets and delay its interim results after filing for bankruptcy protection last month.
The group, one of the biggest names in South Africa’s construction industry, said the disposals would help it meet its debt obligations, cover working capital and cut its liabilities.
In a stock exchange statement, it said its business review had delayed the release of its interim results, which had been due at the end of March.
“The business rescue practitioners believe that the disposals to be undertaken will be in the best interests of the company and shareholders as, if not completed, the company will be unable to meet its financial commitments,” the company said in the statement.
Group Five, which employs over 8,000 people, said it will sell the assets to a number of “potential arm’s length purchasers”, excluding related parties as defined by the Johannesburg Stock Exchange.
It filed for business rescue, similar to Chapter 11 bankruptcy protection proceedings in the United States, in March after its lenders pulled the plug following months of financial problems, threatening the collapse of a company that traces its roots back to the 1970s.
On Friday, it said its liabilities currently outweigh its assets and it was addressing the imbalance with measures including a creditors’ moratorium and through talks with counterparties.
It added that it would provide monthly updates to investors on key asset sales and about other aspects of the rescue process.
Trading of the company’s shares was suspended in March.
Reporting by Emma Rumney Editing by Susan Fenton and Mike Harrison