BASIL READ HOLDINGS LIMITED - Update to the Basil Read Limited Business Rescue Plan

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”)

UPDATE TO THE BASIL READ LIMITED BUSINESS RESCUE PLAN

Shareholders are referred to the announcements previously
released on SENS on 28 June 2019 Basil Read Limited (a
subsidiary of the Company) Business Rescue proceedings and
are advised that the Business Rescue Plan is in the process
of being implemented.

Given that the Business Rescue proceedings of Basil Read
Limited have not been concluded within three months of the
commencement thereof the Business Rescue Practitioners
publish a monthly update report in terms of section 132(3)(a)
of the Companies Act 71 of 2008 (“Companies Act”). In this
regard   the   nine  updates   reports   are   available   on
www.matusonsassociates.co.za/basilread/    along   with   the
Business Rescue Plan and these Update Reports should be read
in conjunction with the Business Rescue Plan.

The seventh to the ninth reports covering the period from
June to September 2019, provide for the following significant
developments:
 1. The status of construction contracts is as follows:
      a. Eleven (11) Contracts have been completed;
      b. A further four (4) contracts were ceded, with the
         support of the client, to other contractors to
         complete;
      c. 5 contracts were terminated by the employers or JV
         partners, however, only two (2) of those resulted in
         the performance guarantees being called;
      d. Basil Read cancelled two (2) contracts; and
      e. There remain two (2) contracts that Basil Read is
         completing.
 2. The above status demonstrates significant progress in
    meeting a key objective of the Business Rescue Plan which
    was   to  facilitate   the   completion  of   loss-making
    construction contracts which will minimise the risk of the
    performance guarantees being called and further burdening
    the balance sheet. In this regard the contingent liability
    of these guarantees has been reduced from R1.141bn to
    R575m.
 3. The other objective of the Business Rescue Plan was to
    maximise the value of construction claims. In this regard
    the Business Rescue Practitioners have reported that the
    process is time consuming, tedious and costly. They have
    however,    noted     significant    positive    victories
    particularly in the TCTA and Transnet contracts. In these
    two instances the DAB ruled in the favour of the company
    for a significant number of claims and reversal of
    negative certificates. The company continues to pursue the
    other outstanding claims which are substantial. The
    success in the recovery of these claims will impact
    materially on the end result of the business rescue
    process
 4. The sale of the non-core assets remains an objective of
    the Business Rescue Plan. In this regard, shareholders are
    referred to announcement regarding the sale of the Head
    Office Properties. It was further announced that the Group
    has moved to new premised enabling a significant reduction
    of the operating costs.
 5. The retained businesses, being the Mining and Development
    business, which are not in business rescue continue to
    perform well and remain self-sustaining. The BRPs have
    appointed an independent sales advisor to value the Mining
    business and adjudicate on potential offers for the
    business.

The business rescue practitioners remain of the view that a
full implementation of the Plan will achieve a better result
than a liquidation.

From a Basil Read Holdings Limited perspective, the
implementation of the Business Rescue Plan of Basil Read
Limited continues. However, its effect at a group level
remains uncertain until it is completed. Therefore, the
suspension will remain in place until the implementation is
complete and the effects on the group can be determined.
Bedfordview
8 October 2019

Company secretary


Emmaus Holdings (Pty) Limited


JSE Sponsor
Grindrod Bank Limited

Date: 08/10/2019 01:15:00
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