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Update to the Basil Read Limited Business Rescue Plan
Basil Read Holdings Limited
Incorporated in the Republic of South Africa
Registration Number 1984/007758/06
Share Code: BSR ISIN: ZAE 000029781
("Basil Read Holdings" or "the Company" or "the Group")
UPDATE TO THE BASIL READ LIMITED BUSINESS RESCUE PLAN
1. Update to the Business Rescue Plan
Shareholders are referred to the last announcement released
on SENS on 27 September 2023 in relation to the Business
Rescue proceedings for Basil Read Limited ("BRL"), a
subsidiary of the Company.
Given that the Business Rescue proceedings of BRL have not
been concluded within three months of the commencement
thereof, the Business Rescue Practitioners ("BRPs") publish
a monthly update report in terms of section 132(3)(a) of the
Companies Act 71 of 2008 ("Companies Act"). In this regard,
thirty one update reports are available on
www.matusonsassociates.co.za/basilread/. These update
reports should be read in conjunction with the Business Rescue
Plan.
The latest Update Report indicate the following:
1.1 BRL has completed all the construction contracts that
were earmarked for completion with the Employers having
issued the Performance Certificates in this regard. BRL
is now targeting the commercial close out, which includes
final account determination and return of Construction
Guarantees for two contracts in namely:
1.1.1 TCTA (Olifants River Water Resources
Development Project – Phase 2);
1.1.2 Eskom Medupi Building Project.
1.2 The aggregate contingent liability in the form of
construction guarantees have been reduced to R25.046
million versus R1.1 billion at the beginning of the
Business Rescue proceedings.
1.3 BRL continues to pursue contract claims as it relies
heavily on claims proceeds to meet its commitments.
Although there has been considerable progress in
obtaining favourable rulings with respect to certain of
these claims, some Employers continue withholding
payments necessitating additional legal action to
enforce the rulings. Thus, the timing of receipts of
funds for these claims remains uncertain. Whilst the
Company remains committed to realising claims to meet
its commitments, the BRPs wish to highlight that to the
extent that the pursuit of these claims continues into
the future, the benefit to be derived therefrom may
diminish.
1.4 The BRPs have reported no further developments in the
realisation of the non-core assets given the prevailing
depressed economic conditions domestically and globally.
1.5 One of the primary objectives of the Business Rescue
Plan was the optimisation, safeguarding and preservation
of the retained businesses. In September 2023, the
directors of Basil Read Mining SA (Pty) Limited (in
business rescue) ("BRMSA") resolved to place BRMSA and
its subsidiary entities into voluntary business rescue
as BRMSA was deemed to be in distress.
BRMSA had incurred operating losses of R73 million for
the seven months ended 31 July 2023 and experienced
negative cashflows over the same period. In July 2023,
BRMSA lost its largest contract at the Gamsberg zinc
mine when Vedanta Zinc Incorporated terminated its
contract with BRMSA. BRMSA had no other significant
contracts in the pipeline and the remaining contracts
are relatively small and do not generate sufficient
revenue and cash flow to carry the current overheads.
Following the termination of the Gamsberg contract the
lenders, who provided the post commencement funding of
BRL, concerned about the potential deterioration in the
value of their security, called on the assets of BRMSA
an the BRMSA entities, which were previously pledged as
security. A number of auctions were advertised for the
sale of these assets.
The proceeds from the realisation of the BRMSA assets,
have been utilised to settle in full all secured post
commencement funding.
1.6 The BRPs remain of the view that a full implementation
of the Business Rescue Plan will achieve a better result
than a liquidation.
2. Impact on the Company and resultant non-compliance
issues
2.1 Subsequent to the Business Rescue proceedings initiated
at BRMSA, which resulted in the commencement of the sale
of the BRMSA assets to settle the post commencement
finance, the remaining business entities of the group
will be wind down after the completion of the Business
Rescue Plan.
2.2 The BRPs are of the view that there will be no value
left after the settlement of the creditors to return to
shareholders.
2.3 Due to the ongoing Business Rescue proceedings of BRL
and the uncertainty it has caused at Group level, the
Company has not been in a position to release any
financial results, since BRL was placed in Business
Rescue in June 2018, and will not be in a position to
release interim financial results for the 6 months ended
30 June 2023.
2.6 The Company and the BRPs are of the view that, as a
result of the ongoing Business Rescue proceedings and
the resultant unavoidable non-compliance with the JSE
Listings Requirements, it is no longer feasible to
maintain the Company's listing on the JSE.
The Company has engaged with the JSE regarding the
potential termination of its listing and will advise
shareholders of the outcome of this process in due
course.
Bedfordview
31 January 2024
Company secretary
Emmaus Holdings (Pty) Limited
JSE Sponsor
Grindrod Bank Limited
Date: 31-01-2024 04:30:00
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