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Restructuring Plan, Covid-19 Update and Trading Statement
Stefanutti Stocks Holdings Limited
(Registration number 1996/003767/06)
Share code: SSK
ISIN: ZAE000123766
(“Stefanutti Stocks” or “the company” or “the group”)
RESTRUCTURING PLAN, COVID-19 UPDATE AND TRADING STATEMENT
FUNDING AND RESTRUCTURING PLAN
The board of Stefanutti Stocks hereby provides shareholders with a further update on the Funding Plan
as reported in the Unaudited Condensed Consolidated Results of Stefanutti Stocks for the 6 months
ended 31 August 2019 (the “Previous Announcement”) and subsequent announcements (collectively
the “Subsequent Announcements”).
As reported in the Subsequent Announcements, a strategic restructuring team has been appointed to
advise on and assist with the development and implementation of a detailed turnaround programme for
the group, including the securing of requisite additional short-term funding from the company’s primary
banker and guarantee providers (the “Lenders”) and the subsequent restructuring of all such short-term
funding into appropriate longer-term funding (the “Restructuring Plan” or “Plan”).
Shareholders are advised that the Restructuring Plan has now been fully developed, including having
regard to the potential impact of the Coronavirus (“COVID-19”) on the group and its business. The Plan
has been approved by both the company’s board of directors and the Lenders and envisages, inter alia:
• the sale of non-core assets;
• the sale of certain divisions/subsidiaries;
• internal restructuring initiatives required to restore optimal operational and financial performance;
• the securing of additional short-term funding of R430 million, of which R270 million relates to the
negative effects of the national lockdown due to the COVID-19;
• the restructuring of the short-term funding received to date from the Lenders into a term loan;
and
• evaluation of an optimum business model and associated capital structure analysis including the
potential of raising new equity.
The purpose of the Plan is to put in place the optimal capital structure and access to liquidity to position
the group for long-term growth in this dynamic environment.
The Lenders have agreed to provide additional short-term funding to the group and to the restructuring
of the short-term funding into longer-term funding, subject to certain financing conditions being met,
including the conclusion of long-term funding agreements. In addition, the Lenders have agreed to
provide continued guarantee support for the projects being undertaken by the group.
The Restructuring Plan is anticipated to be implemented over the financial years ending February 2021
and February 2022 and, to the extent required, shareholder approval will be sought for relevant aspects
of the Plan.
COVID-19 UPDATE
Further to the voluntary announcement released on 7 April 2020 regarding the impact of COVID-19
lockdown on the group with the recent move from level 5 to level 4 restrictions, the impact on the group's
South African operations has been eased by the partial re-opening of certain sectors of the economy.
Under level 4 restrictions civil engineering for public works projects including water, energy, sanitation,
public works, civil engineering, construction works, road and bridge projects, together with road repair
and critical maintenance are permitted. However, due to ongoing restrictions on certain other sectors,
not all the company’s businesses are operating at full capacity.
Stefanutti Stocks’ priority continues to be the health and safety of its employees. The management of
the group remains committed to supporting the initiatives that the governments have implemented in
the various countries in which the group operates. Importantly, Stefanutti Stocks maintains its close
working relationships with clients and key stakeholders to mitigate the extensive impact of COVID-19
and mitigate the long-term effects on its business.
As part of its response to the virus, a special task team was constituted to monitor, provide guidance
and immediately respond to this continuously changing environment. The group has instituted the
required protocols focused on ensuring the health and safety of Stefanutti Stocks’ employees and
stakeholders, in terms of the guidelines provided by the World Health Organisation, the National
Institute for Communicable Diseases, the Department of Health and other regulatory authorities in each
of the jurisdictions in which Stefanutti Stocks operates.
Set out below is an update of the status of the group's current operations:
• In South Africa, work has commenced on approximately 60% of projects.
• In Botswana and Eswatini, work has commenced on all projects.
• In Mozambique, one project remains closed, whilst all remaining projects are fully operational.
• In Zambia and the United Arab Emirates, all projects are fully operational.
With the move from level 4 to level 3 restrictions from 1 June 2020, it is anticipated that work on the
majority of the South African operations will resume.
The group is committed to ensuring that those applicable projects which are expected to recommence
as the lockdown restrictions are further eased, will take place in a phased and risk-adjusted manner.
The unknown impact of the COVID-19 pandemic, together with the various protocols available to
governments, has created an uncertain and fluid environment in which the group finds itself. It is,
therefore, not possible to obtain an accurate assessment of the impact this will have on the group and
its markets going forward. To this end, Stefanutti Stocks will continue to update all shareholders
(including progress under the Restructuring Plan).
TRADING STATEMENT AND ANNUAL REPORTING
On 7 April 2020 shareholders were advised that the annual reporting periods will be extended in line
with the market notice issued by the Financial Sector Conduct Authority on 3 April 2020 and related
JSE Limited guidance issued on this matter. Stefanutti Stocks hereby provides shareholders with a
trading update of the group’s results for the year ended 29 February 2020. The group’s trading
performance for the second six months to 29 February 2020 has resulted in no significant change from
that reported in the Previous Announcement. As a consequence, earnings per share (“EPS”) and
headline earnings per share (“HEPS”) are expected to be a loss of between 610,00 cents and
650,00 cents per share respectively. The corresponding 2019 reporting period reflected EPS and HEPS
to be a loss of 65,99 cents and 70,12 cents respectively.
Shareholders are advised that this announcement does not constitute a profit or earnings forecast and
that the financial information on which this trading statement is based has not been reviewed or reported
on by the group’s auditors.
Shareholders will be advised when the results for the year ended 29 February 2020 will be published.
29 May 2020
Johannesburg
Sponsor: Bridge Capital Advisors Proprietary Limited
Date: 29-05-2020 02:59:00
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