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CONSOLIDATED INFRASTRUCTURE GROUP LIMITED - Voluntary business rescue application

Release Date: 10/11/2020 13:40
Code(s): CIL     PDF:  
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Voluntary business rescue application

CONSOLIDATED INFRASTRUCTURE GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2007/004935/06)
JSE share code: CIL ISIN: ZAE000153888
(“CIG” or the “Company” or the “Group”)


VOLUNTARY BUSINESS RESCUE APPLICATION

Since March 2019, shareholders have been advised of the ongoing efforts of the Company and its funders to conclude
various agreements to restructure the short-term debt profiles of both the Company and its subsidiary, Consolidated
Power Projects Proprietary Limited (“Conco”), into a longer-term, more sustainable, debt structure.

The Company has been in negotiations with its debt providers (being four of CIG’s Domestic Medium Term Note
Programme (“DMTN”) bond holders and Fairfax Africa Investments Proprietary Limited), as well as with Conco’s
lenders and guarantee providers (for whom, the Company stands as guarantor for all amounts outstanding and
guarantees in issue) (collectively the “Group Lenders”) with a view to restructuring its debt to ensure the maximum
possible return to stakeholders.

The restructure process, given the diverse mandated positions of the lending institutions involved, has been complex
and time consuming, exacerbated by the Covid-19 crisis and the current state of the South African construction sector
and economy.

Negotiations with Conco’s lenders and guarantee providers for a voluntary restructure were unsuccessful, with
Conco’s lenders placing a demand on Conco, calling for immediate payment of all amounts outstanding under the
facilities utilized by it with these lenders, amounting to circa R1,1 billion. As a result, shareholders were advised that,
on Monday, 2 November 2020, the board of directors of Conco resolved that it would be in the best interests of
Conco’s stakeholders, to commence with voluntary business rescue proceedings in terms of section 129 of the
Companies Act, 71 of 2008. Petrus van den Steen and Martin du Toit Liebenberg accepted the appointment as joint
business rescue practitioners of Conco.

While certain important milestones in moving towards a Company restructure were achieved (including the signing of
a binding term-loan facility agreement with four of CIG‘s DMTN bond holders in March 2020, the appointment of
Metis Strategic Advisors Proprietary Limited to advise the board of directors of CIG (the “Board”) on the restructure
of debt with Group Lenders and the appointment of a chief restructuring officer at Conco), with a lenders demand
placed on Conco, which is unlikely to be fully paid by Conco, a call on the liabilities guaranteed by the Company to
the Conco lenders is highly probable, placing additional financial pressure on the Company. In addition, the Company
remains exposed to additional financial liabilities from parent company guarantees that were given to underwrite
construction guarantees that have been provided to the Conco group, to the value of approximately R1,5 billion which
may now also crystalize.

Whilst the Company holds interests in several high-quality assets, the Company has its own debt, which is mostly
short-term in nature and approximates R1,1 billion. This Company debt, together with any Conco lenders amounts
unpaid by Conco, as mentioned above, as well as the risk of further financial liabilities crystalizing from construction
guarantees provided to the Conco group, places significant financial pressure on the Company.

With the reasonable prospect of concluding a requisite restructure with the Group’s Lenders now unlikely,
shareholders are hereby advised that, on Monday, 9 November 2020, the Board, after careful consideration and
consultation with its professional advisors, resolved that it would be in the best interests of CIG’s stakeholders, to
commence with voluntary business rescue proceedings in terms of section 129 of the Companies Act, 71 of 2008.

The Board is currently finalising the appointment of a business rescue practitioner and will lodge the necessary
documents for their appointment with CIPC in the next few days.

Shareholders will be updated as further material information becomes available.

Shareholders are referred to the cautionary announcement published on Monday, 26 October 2020 and are reminded to
continue to exercise caution when trading in CIG shares until a further announcement in this regard is made.

10 November 2020

Sponsor
Java Capital

Date: 10-11-2020 01:40:00
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