Fri, 23 Oct 2020

Construction company Basil Read says this month it finally concluded the Olifants Water Resources Development Project that resulted in it going into business rescue.

Basil Read embarked on the business rescue proceedings in 2018, following a R1 billion loss after tax for the 2017 financial year. It has been battling to regain its footing as South Africa's construction industry continues to decline. The company is yet to conclude the proceedings and has been providing reports on its progress.

In its latest report, published on Wednesday, Basil Read said it had completed the Olifants Water Resources Development Project for the Trans Caledonian Water Agency (TCTA), the company had won the more than R1 billion project in 2012.

The project is meant to supply bulk water for mining developments in Limpopo and contributed significantly to the construction company's financial distress that led to the business rescue proceedings.

Basil Read also said two of the 27 projects it had when it went into business rescue are still active. And it has reduced its aggregate contingent liability in the form of performance and retention guarantees from R1.1 billion, when it began the proceedings, to the current R154 million.

Its contract claims have been slowed down by uncertainty and delays caused by the Covid-19 lockdowns but the company said it continues to pursue them.

Although the mining services and developments businesses have also been impacted by the pandemic, after some clients were unable to fulfil their contracts and others were terminated, the businesses managed to preserve their cash and continue to be sustainable.

"The business rescue practitioners remain of the view that a full implementation of the plan will achieve a better result than a liquidation," the company said in its statement.

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