Six years ago, Group Five looked like another cautionary tale of South Africa's construction bust. Today it is something rarer: a rescue that actually worked. The business rescue practitioners running the once-listed builder have formally ended proceedings that began in March 2019, one of the longest business rescues the country has seen, with every creditor set to be paid in full.
How bad it was
When Group Five collapsed into business rescue in 2019, it owed about R7 billion, faced more than 2,300 creditors, ran 119 active construction projects and employed close to 6,000 people across a sprawling group of some 180 companies. It had once been a market darling: its shares peaked at R74 in 2007 on the pre-World Cup building boom, before crashing to 89 cents when trading was suspended and the group delisted. Independent analysis by PwC reckoned that a straight liquidation would have paid secured lenders as little as 65 cents in every rand, and ordinary creditors just 3.4 cents, with nothing at all for shareholders.
How it ended
The outcome is very different. All secured and ordinary creditors have been paid in full. Of the 119 projects, 101 were carried through to completion or safely handed over, and key businesses such as Intertoll Europe and Everite were sold as going concerns rather than shut down, fetching more than anyone had expected. Fewer than 15% of the roughly 5,862 staff were retrenched over the six years, with many moving across to new owners along with the businesses they worked in. The group that had spanned some 180 companies has been whittled down to about 54 as the estate was wound in. Joint practitioner Dave Lake says the process overachieved its aims.
There may even be a surplus left over for shareholders once the last matters are wrapped up, almost unheard of in a rescue this size. Group Five now enters a wind-down under an interim board, with finance chief Anthony Clacher promising to conclude the remaining tax, audit and legal matters prudently on behalf of stakeholders. It is a quiet ending for a company that once boomed on the 2010 World Cup construction wave.
