Full implementation of Basil Read Ltd.’s business rescue plan may avoid liquidation


Basil Read Holdings have released an update in relation to the Basil Read Limited’s (‘BRL’- a subsidiary) business rescue proceedings announced in September.

Due to the business rescue proceedings of BRL having not been concluded within the three months of the commencement of these proceedings, the business rescue practitioners publish a monthly update report in terms of section 132(3)(a) of the Companies Act 71 of 2008. Twelve update reports are available on Matuson Associates’ website alongside the company’s business rescue plan.

The latest report (the fourteenth report) covering the period between September and November 2020 indicates that the following matters remain unchanged:

  1. There are two construction contracts that are still active versus twenty-seven contracts at the beginning of the rescue proceedings. The remaining contracts are Rosetta Water Works Plant – Umgeni Water and Medupi Buildings – Eskom. These contracts are expected to be completed in the first quarter of 2021.
  2. The aggregate contingent liability in the form of guarantees have been reduced to R154 million versus R1.1 billion at the beginning of the rescue proceedings.
  3. BRL continues to pursue contract claims; however, the process remains protracted, costly, and has been adversely impacted by the Covid-19 related lockdowns. Notwithstanding these challenges BRL has been successful in obtaining favourable rulings with respect to certain of these claims. Unfortunately, Employers unlawfully continue withholding payments flowing from these rulings. Consequently, the Company has had to take additional legal action to enforce the rulings. The Mining Services and Developments Businesses continue operating.
  4. The business rescue practitioners remain of the view that a full implementation of the business rescue plan will achieve a better result than a liquidation.
  5. 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.

Due to the ongoing business rescue process of BRL, the company has not been able to release its most recent financial results for the period ending 30 June 2020 and will not be in a position to release financial results for the period ending 31 December 2020.