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 19 June 2020 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 publish a monthly update
report in terms of section 132(3)(a) of the Companies Act 71
of 2008 (“Companies Act”). In this regard, twelve update
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 latest report being the thirteenth report covering the
period from June to September 2020, provides for the following
significant developments:
 1. Despite the significant business disruptions from the
   COVID-19 global pandemic, Basil Read Limited (“BRL”) has
   successfully     completed    the    TCTA   project,   with   the
   Performance Certificate being issued on 10 September 2020.
   This   project   was   the   most   complex,   material,   with  a
   significant liability that adversely contributed to the
   company’s financial distress.          The project is in the
   process of financial closure relating to the significant
   claims, which will form part of the final account.
2. There are 2 (2) construction contracts that are still
  active versus twenty-seven (27) contracts at the beginning
  of rescue proceedings. Most of the contracts have been
  completed,      ceded   or descoped amicably. Only four(4)
  contracts were terminated.

3. The aggregate contingent liability in the form of
  performance and retention guarantees have been reduced to
  R154 million versus R1.1bn at the beginning of the rescue
  proceedings.

4. The site activities that were suspended due to the impact
  of the Covid-19 virus and the subsequent national state
  of emergency declared by the South African Government on
  26 March 2020 and State of Emergencies declared in
  Botswana, Namibia, Lesotho and Swaziland have resumed
  gradually.

5. BRL continues to pursue contract claims; however, the
  process remains protracted and costly. The Company has
  however managed significant success in the resolution of
  many such claims. The claims processes have also been
  impacted by the Covid-19 related lockdowns, particularly
  the matters that were to be heard in Courts or Arbitration.
  Despite these delays and uncertainties, BRL successfully
  obtained judgements and rulings in its favour for
  outstanding payment certificates.

6. The Mining Services and Developments Businesses were also
  adversely impacted by the pandemic with various clients
  declaring force majeure and certain long-term contracts
  being terminated with several retrenchments as a result,
  particularly within the Mining Business.
 7. However, these businesses have managed to preserve cash
   in order to remain sustainable despite the impact of this
   pandemic.

 8. The Mining Business has managed to secure two new
   contracts in Namibia.

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

 10. 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

23 September 2020


Company secretary


Emmaus Holdings (Pty) Limited


JSE Sponsor
Grindrod Bank Limited

Date: 23-09-2020 05:15:00
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