The South African group announced Friday its bankruptcy. The end of a long adventure for an iconic rainbow nation.
The news fell like a cleaver: The group Basil Read, long one of South Africa’s flagship construction sector, announced Friday afternoon to have placed itself under the protection of the bankruptcy law. At the Johannesburg Stock Exchange, where the company is listed, the effect was immediate: the stock ended down 89%, trading at two cents at the close, after touching a low of one cent in session .
The announcement of this bankruptcy is the culmination of a long descent into hell for the company, which in the late 2000s, was considered one of the stars of the financial center of South Africa. Reached in particular by the promises of massive investments of the South African State in the field of infrastructures, with the approach of the football World Cup of 2010, the company sees then its title to quote at 30 rand (1500 times more than today) for a total valuation of 5 billion rand (380 million dollars). Many of these promises of public spending will never materialize, however, as the financial crisis of 2008-2009 passed through. An unfortunate situation for Basil Read who, like other South African companies active in the construction, has heavily indebted to build ahead of time infrastructure projects expected to be subsequently funded by the State.
The company has since steadily sank into an endless spiral to try to meet its multiple financial commitments: after announcing in March a net loss of more than one billion rand ($ 75 million) for the In FY207, Basil Read’s management recognized that the group’s total liabilities (RUR 2.1 billion) far exceeded its total assets (FF 1.4 billion). It is finally the recent decision of the consortium of praetor institutions to no longer extend its funding to the group in difficulty that has been the reason for it. The disappearance of Basil Read puts an end to an entrepreneurial adventure that began in 1952 and which has been behind some of the most iconic achievements of the rainbow nation (Kyalami Circuit, headquarters of the Nedbank group in Sandton, complex Real Estate Cosmo City …).