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Funding Plan update and trading statement
Stefanutti Stocks Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/003767/06)
Share code: SSK ISIN: ZAE000123766
(“Stefanutti Stocks” or “the group”)
FUNDING PLAN UPDATE AND TRADING STATEMENT
In terms of paragraph 3.4 (b) of the Listings Requirements of the JSE Limited, the board of directors of
Stefanutti Stocks hereby provides shareholders with a trading update of the group’s results for the six months
ended 31 August 2019 (results for the period).
FUNDING PLAN UPDATE
On 26 July 2019 shareholders were advised that R120 million (‘first tranche’) had been received by the group
as specific ring-fenced project funding through the first component of the Funding Plan. Further to this, the
group embarked on a process with its primary banker and guarantee providers (‘Lenders’), whereby the
Lenders have provided the group with additional secured short-term funding amounting to R391 million
(‘second tranche’) on 5 November 2019. The group remains in discussions with the Lenders to secure
additional tranches of funding. The funds received from the first and second tranches have been utilised to
meet the group’s short-term liquidity requirements, which allows more time for the group to resolve its
contractual claims on the public sector power project, and to simultaneously explore and evaluate longer term
cost effective funding solutions.
A strategic restructure team has been appointed to develop and assist with the implementation of detailed
turnaround interventions for the group (‘Restructuring Plan’), including the securing of any requisite additional
short and long-term funding.
The short-term funding carries the normal terms and conditions applicable to loans of this nature, and the
successful conclusion thereof is a pre-requisite to obtain the required long-term funding.
The Restructuring Plan will include an assessment of:
• the sale of non-core assets including divisions/subsidiaries; and
• capital structure analysis including the possibility of raising new equity; and
• internal restructuring initiatives required to restore optimal operational and financial performance.
Once finalised, the Restructuring Plan will be considered by the board of directors for approval. Thereafter,
shareholders will be updated as to the Restructuring Plan and the anticipated timing of the implementation
thereof.
TRADING STATEMENT
Public Sector Power Project
During the current reporting period, the client has adopted a more intractable approach to authorisation of
certificates for work done on the large public sector power project, which has led to a substantial increase of
internal funding required for this project. Although the group has initiated a dispute process with the client to
pursue its contractual rights and recover the amounts owing to it, this has placed an additional burden on the
group, increasing the initial funding requirement of R400 million to approximately R986 million. Consequently,
in addition to the provision of R263 million raised at February 2019, for the potential unrecoverable preliminary
and general costs, the group will raise a further provision of R462 million for potential unrecoverable monthly
measured works to complete the project.
The group’s results for the period will be impacted by the following:
Provision for future costs - public sector power project as noted above R462 million
Provision for slow paying trade receivables R331 million
Specific project losses R260 million
As a result of the above, earnings and headline earnings per share are expected to be a loss of between
600,00 cents and 640,00 cents per share respectively. The corresponding 2018 reporting period reflected
earnings per share of 61,76 cents and headline earnings per share of 60,30 cents.
The financial information on which this trading statement is based has not been reviewed or reported on by
the Group’s auditors.
The release of the results for the six months ended 31 August 2019 is anticipated to be published
on 28 November 2019.
Johannesburg
21 November 2019
Sponsor: Bridge Capital Advisors Proprietary Limited
Date: 21/11/2019 04:22:00
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