Basil Read reels as four directors quit

four directors of construction group basil read have resigned, amplifying signals that the company is in trouble.
the announcement yesterday comes shortly after the resignation of the group's ceo, a failed empowerment initiative and the group's warning that earnings for the year to december would fall.

basil read did not state reasons for the resignations of french nonexecutive directors henri-pierre maury, olivier-marie racine, olivier monfort and jean-philippe trin in its statement to the jse securities exchange sa yesterday.

french construction group bouygues owns slightly more than 70% of basil read.

basil read' s french ceo, albert bernardo, resigned in october for undisclosed reasons. he has been replaced by south african national marius heyns, who was not available for comment yesterday.

the appointment of the south african the first after three consecutive french ceos has been welcomed by a sector analyst who said that previous french managers struggled to understand the domestic market.

basil read had been losing market share to its competitors in sa for several years, said the analyst yesterday.

efforts to bring in an empowerment consortium led by former basil read employee mervyn chavda, former mp mohseen moosa and soccer kingpin jomo sono, also failed late last year.

this setback is likely to be a further disadvantage in the company's race against empowered rivals to secure business, especially government contracts. the company warned last month that its results for the year ending december 2004 could be 190%-210% lower than those of the previous financial year.

analysts expect basil read to report a loss for the period. the company blamed its poor performance at the interim stage mainly on the continued slowdown within the civil engineering sector in sa, which resulted partly from the strong rand.

basil read sold its namibian operations, which had suffered from problematic road-building contracts, to bouygues last month.

the group's share price has crashed, dropping from a high of 240c a share earlier last year to 90c now. the share price declined about 2,4% after the company announced the directors' resignation yesterday.