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DealMakers - 2022 Annual

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Business Rescue Transaction of the Year

Consolidated Infrastructure Group (CIG) and Consolidated Power Projects (CONCO)

Consolidated Infrastructure Group Limited (CIG) was one of the largest energy infrastructure and construction businesses in Africa. Listed on the JSE, it operated several business units consisting of 75 subsidiaries across 25 (predominantly) African countries.

Despite holding interests in several high-quality assets, CIG had come under increasing financial pressure in the years prior to the commencement of its business rescue proceedings, most notably due to poor performance of its power construction business unit under the CONCO name. At the time of going into business rescue, CONCO had 95 ongoing construction projects across 15 countries, many of which were facing serious operational and commercial challenges.

Given the circumstances and the level of indebtedness of the wider CIG group, a two-pronged approach was taken in respect of the business rescue proceedings:

  • CIG’s healthy business units were restructured where necessary and sold at the best possible values to both maximise dividends for CIG creditors, and to ensure the continued trading of such businesses outside of the troubled CIG environment. Birkett Stewart McHendrie were appointed to manage these disposal processes.

  • CONCO’s portfolio of distressed construction projects was put into a managed winding down process, aimed at completing viable projects and recovering as much of the R1,4bn in construction guarantees as possible.

Local Advisers

Birkett Stewart McHendrie, Metis and Werksmans

In November 2020, CIG was placed into business rescue along with CONCO’s primary South African operating entity, Consolidated Power Projects. Metis Strategic Advisors were appointed as the joint business rescue practitioners for both rescues.

While CIG’s direct operations and the disposal processes of its various business units did not require post-commencement funding, CONCO’s winding down process entailed the successful raising of approximately R300m in post-commencement finance, which was graciously provided by CONCO’s lenders, and of which approximately 40% is expected to be repaid at the end of the day.

Notwithstanding the challenges and complexities, the CIG and CONCO business rescues have delivered outstanding outcomes for their stakeholders and affected parties (employees, creditors, clients, and regulators). CIG has been de-listed from the JSE. To date, 57 of CONCO’s 95 ongoing construction projects have been successfully completed (12 remain with ongoing activities). 

Approximately R800m in construction guarantees have been recovered and it is expected that by the end of the business rescue proceedings, over R1bn in construction guarantees will be saved. CIG’s secured creditors are expected to receive the full value of their capital back with partial settlement of accrued interest, while CIG’s unsecured creditors will receive approximately 9 cents in the Rand, of which 8 cents has already been paid. Additionally, and while not initially envisioned, 55% (by value) of CONCO’s unsecured creditors have been settled via direct client payments and settlements. Over 1,000 employees (of about 1,800 at the start of business rescue) have been transferred to new employers and only 30% of employees have been retrenched, but all have received full severance packages.

Comment from the Independent Panel:  The complex group structure and 25 jurisdictions made this a very difficult process. It required multiple sales processes, as well as the managed winding down of parts of the group, leading to a far better outcome for all stakeholders when compared with liquidation.

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The scale and complexity of these interjoined business rescues was evidenced by the circumstances that were faced at their commencement. The CIG group had over 1,800 employees and over 1,200 individual creditors that were owed more than R6bn. Additionally, CONCO had over R1,4bn of active construction guarantees at risk, which if called upon by clients due to CONCO’s failure to perform on its projects, would have crystallised those liabilities for the group and for the underwriting financial institutions.

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BR Pick of the best in alphabetical order

Andalusite Resources

The country’s remaining independent andalusite producer exited the business rescue process in May 2022, having been placed under supervision in June 2019. A world class strategic asset, Andalusite Resources is one of three main suppliers of andalusite globally, with a 23% market share. 

Andalusite Resources was established in 2001 to exploit the Maroeloesfontein andalusite deposit in the Northam/Thabazimbi region of the Limpopo province, an area known for its platinum, chrome and iron mines. It produces an estimated 76,000 metric tonnes per annum, with potential to produce up to 80,000 metric tonnes per annum at full capacity. The mineral forms a crucial part of the steady supply of heat-resistant and heat-insulating products made by the refractory industry, supplier to major industries such as iron and steel.


Eight expressions of interest were received from the disposal process which commenced in July 2019, resulting in the receipt of a meaningful offer from two bidders. The process was interrupted by the advent of the COVID-19 pandemic, resulting in the withdrawal of one of the offers, though later reinstated.

Sale of business agreements were fully negotiated with both competing bidders, with creditors afforded the opportunity to determine which fully negotiated and signed sale of business agreement they preferred to proceed with when voting on the business rescue plan. This was done transparently, on the basis that each bidder was aware that another competing bidder existed. The process was innovative and unique. Costs were reduced by limiting the appointment of outside advisers – the legal advisers were tasked with ‘running the process’ which ultimately benefited the creditors, who received a higher dividend as a result.

ARM (a subsidiary of Nikkel Trading 392), a South African entity, emerged as the winning bid. ARM’s offer amounted to R121,4m. The business and all 181 employees were successfully transferred to ARM under the same terms and conditions.

Local Advisers

GCW Administrators and Werksmans

Ster-Kinekor Theatres

SA’s largest cinema chain, with 65% of market share, entered business rescue in January 2021, citing financial distress due to COVID-19 related restrictions and increased competition from streaming platforms. The pre-emptive move by the Board was made to protect the business and maximise the chance of preserving it as a going concern.


Immediate loss of all cashflow from the inability to trade due to unprecedented lockdowns and, thereafter, the lack of film content due to the impact of the pandemic on the operations of major suppliers of blockbuster films saw the company’s liquidity come under strain.

Comment from the Independent Panel:  This is a strategically important asset which was successfully sold to a South African bidder. The process spanned multiple years during COVID, but ultimately resulted in jobs and production being preserved.

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The business rescue process was complex – the 127-year-old, iconic South African brand had 57 cinema sites, with operations in Namibia, Zambia and Zimbabwe, necessitating the need to restructure over 50 leases with 20 respective landlords. The cost base was reduced with a turnover-linked rental deal negotiated with landlords, and the site portfolio rationalised to focus on profitable cinemas. This was a critical success factor, achieved through regular, transparent and effective communication, alongside specialist input.

With the belief that Ster-Kinekor remained relevant and could emerge from business rescue, the BRP continued to invest in the business to preserve future growth prospects. 

Various competing bids were received. The investor consortium ultimately selected was one already invested in other cinema assets globally, and which therefore understood the sector, enabling the acceleration of closure of the sale process. The consortium – comprising UK-based asset manager Blantyre Capital and local private debt manager, Greenpoint Capital – emerged as the successful bidder in the R250 million refinancing, restructure and sale of Ster-Kinekor’s assets. 

The deal was structured in such a way that if certain hurdles are achieved, a minority share of the ownership of the group will pass to employees, many of whom are historically disadvantaged persons, thereby improving the B-BBEE status of the group.


For employees, consumers and suppliers, the sale to new shareholders who have the capital and experience to take Ster-Kinekor to the next level was a significantly important outcome. In November 2022, the company exited business rescue, having continued to operate throughout the process, and without the loss of +-800 direct jobs. BR practitioner at EY, Stefan Smyth said, “it was one of the most diverse and ultimately rewarding outcomes, particularly because of the exceptional challenges faced due to the global, not just local, effects of the pandemic”.

Local Advisers

EY, Webber Wentzel, Baker McKenzie and Mike Pienaar Consulting

Comment from the Independent Panel:  The successful sale of this high-profile asset led to the saving of c. 800 jobs and allowed the business to successfully continue operating.

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