Covid-19 increases pressure on Stefanutti

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Covid-19 increases pressure on Stefanutti

Published Date: 2020-04-08 | Source: Stephen Gunnion | Author: Stephen Gunnion

Covid-19 increases pressure on Stefanutti

The construction group says most governments in the countries where it operates have clamped down on non-essential projects.

Stefanutti Stocks has temporarily closed the majority of its construction sites due to lockdown conditions in most of the countries where it has projects. The embattled construction group says due to the rapidly-evolving situation, it's not possible to estimate the financial impact of Covid-19 on the group.

In SA, most projects have stopped with the exception of certain Mining Services projects which are deemed essential. In Botswana and eSwatini (Swaziland) projects have been suspended with the exception of one project each which are deemed essential, while only one project has been stopped in Mozambique. All projects in Zambia and the United Arab Emirates are operational.

Stefanutti has been battling liquidity issues due to non-payment from some of its clients, forcing it to negotiate additional funding from its lenders. It said its priority remained continuing to progress a funding plan it put in place last year while dealing with the fallout from the pandemic.

When it released its interim results in December, it announced that its primary banker and guarantee providers had given it additional secured short-term loans of R227.5 million - the third tranche of funding it had secured following R391 million raised a month earlier and R120 million it got in July as specific ring-fenced project funding. It said it remained in talks with its lenders to secure additional tranches of funding and explore longer term cost-effective funding solutions.

Stefanutti's shares fell 5.3% to 18c yesterday. The update was released shortly before the close of trade.





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