54-year-old South African construction giant goes from zero to hero
JSE-listed Stefanutti Stocks has completed a four-year restructuring following a R580 million settlement from Eskom.
Corporate restructuring specialists Metis Strategic Advisors helped stabilise and restructure the JSE-listed construction group, resulting in an operational and balance-sheet turnaround.
“With only a handful of major contractors remaining, the preservation of StefStocks, a key participant in national infrastructure development, is of critical national economic importance,” said Metis.
“It was operating with severe working capital constraints in the latter half of 2019, in no small part due to the dispute with its client Eskom over the recovery of money for services rendered at the Kusile Power Station.”
The share price of Stefanutti Stocks on the JSE declined during 2019, from R3.60 at the beginning of the year to 13 cents by December 2019.
The company, which was founded as small construction venture in 1971, was then dealt a further blow from the COVID-19 crisis, which exacerbated the issues the company was facing.
Metis said that the early intervention from the Board of Stefanutti helped stop the business from going into rescue or liquidation.
“Had this occurred, thousands of jobs, long-standing supplier networks and major public-sector infrastructure projects could have been at risk,” it said.
The restructuring plan, which was updated on several occasions, included: Extending the repayment date for existing bank facilities;
- Extending the repayment date for existing bank facilities;
- Raising additional funding on a few occasions, allowing Stefanutti to significantly reduce overhead costs;
- The sale of non-core assets and operations;
- Winding down non-profitable business; and
- Programs to drive the recovery and collection of outstanding claims on behalf of the company.
Eskom payout
Metis said that a key recent development in the company’s favour was a settlement signed with Eskom on 24 November.
In October, the Dispute Adjudication Board ruled that Stefanutti was entitled to a payment of R685 million, excluding value-added tax, from Eskom, after both parties claimed that monies were owed to them.
After Eskom threatened to escalate the matter further, the parties agreed to a settlement, where Eskom would pay Stefanutti R580 million for work done at the Kusile Power Station.
Kusile is the most expensive coal power station in human history, but has been marred by operational and financial errors. It took 17 years to complete, 11 years late, and cost over R200 billion.
Metis said that the settlement marked a crucial milestone of the restructuring plan, as the group paid 80% of the proceeds from the Eskom settlement to settle an outstanding facility from Standard Bank.
“The final critical milestone of the restructuring plan was the conclusion of the remaining conditions attached to Stefanutti’s facility arrangements with Standard Bank,” said Metis.
“These requirements were fulfilled with the company concluding a new R850 million facility agreement with the bank in October to settle its current loans with lenders.”
This means that all the elements of the restructuring plan were met, helping the company and its funders formally terminate the restructuring plan.
Stefanutti Stocks is one of South Africa’s largest construction employers, with 6,336 employees across its operations, and pays over R2 billion annually in wages.
In the 2025 financial year, the group generated R7.7 billion in contract revenue, secured an order book of R8.6 billion, and reinvested R452 million in capital expenditure for projects, including those in renewable energy.
The restructuring has seen the group’s share price increase from 13 cents (R25 million market cap) to its current R4.50 cents per share (R850 million market cap).
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