Group Five puts three units up for sale in business rescue plan

Group Five is preparing a sale of three of its biggest subsidiaries as the former South African construction giant strives to salvage what it can from bankruptcy proceedings.

Intertoll Europe, a highway and toll developer based in Budapest, is among the trio of assets Group Five has put on the market, David Lake, one of the Johannesburg-based company’s business rescue practitioners, said in an interview. The other two are Everite, which does building and roofing work, and South African real-estate development firm G5 Properties.

“The group is looking to get fair value for all deals, including larger sales of subsidiaries,” said Lake, a former managing director of Rothschild & Co’s South African unit. The three divisions are “generating a lot of interest,” he said, declining to comment on asking prices.

Once valued at as much as R8.2bn, Group Five filed for bankruptcy protection in March.

The company is one of five South African building companies to enter business rescue this year, as a depressed economy and low spending on infrastructure batters the industry. Lake and Peter van den Steen, the other business practitioner, have been hired to salvage what they can from the business and protect some of about 8 000 jobs.

Group Five is also attempting to complete at least 65 unfinished construction projects, Lake said. The work, alongside bank support and cash from smaller disposals, will enable the company to pay salaries and ongoing capital expenditure during the bankruptcy process, he said.

While Group Five might not continue to operate under that name, most of the business units will continue independently or under new owners and thousands of jobs will be saved, said Lake.

Shareholders will vote on the detailed business rescue plan on June 28.

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