Esor to delist next month


Esor to delist next month

Published Date: 2020-05-21 | Source: Stephen Gunnion | Author: Stephen Gunnion

Esor to delist next month

The construction group will delist on 22 June, a week after Group Five also exits the exchange due to the slump in the sector.

Esor will delist from the JSE next month, almost two years after the group suspended trading in its shares and entered business rescue. The beleaguered civil engineering and construction group says shareholders are likely to be left with nothing.

Esor asked for its shares to be suspended in August 2018 after its Esor Construction subsidiary entered business rescue, with the holding company following a week later. Significant losses on some construction contracts, the challenging economic environment faced by the sector and debts of R130 million had left its Construction division financially distressed. It was unable to secure short and medium-term funding.

The company's business rescue practitioners (BRPs) said in February that steps taken to find a possible investor for Esor had been unsuccessful and that it was highly unlikely that any restructuring proposal would be able to provide value for the company's shareholders. They said the only possible return might be on a pro rata basis to its creditors, with the issued shares retaining no value.

Esor also no longer complied with the JSE's listing requirements as it had just one executive director, no board committees, auditors or company secretary, and had been unable to release any financial statements since its last results released in July 2018 showed an operating loss of R300 million.

Earlier this month, fellow construction firm Group Five said its shares would be delisted from the JSE on 15 June. Trade in its shares was suspended in March last year and it was placed into business rescue after banks turned down its request for more funding. Group Five's BRPs also said there was no realistic prospect of there being anything left for holders of its equity.

Business rescue is a form of bankruptcy protection aimed at helping to rehabilitate insolvent companies and providing temporary supervision and management of the business so that it can be nursed back to health, if possible. The aim is to keep businesses functioning to preserve jobs while structuring payment schemes for creditors.

Esor's shares were trading at 3c when they were suspended. It first listed on the JSE's AltX in 2006 before before progressing to the Main Board in 2009 as Esorfranki. It reverted to Esor Limited in 2014.

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