CORONAVIRUS PUSHING CONSTRUCTION FIRMS INTO ADMINISTRATION

The wave of financial challenges troubling businesses in the construction industry is becoming alarming. Countries like South Africa and Nigeria had been struggling with their economy before the global pandemic. In these uncertain times, leaders across Africa are scrambling for international loans to salvage their economies. Some have outrightly requested for debt cancellation.

Business owners are not left out in this scramble for cash to save their alining business. In South Africa, Bloomberg Africa writes about a Morgan Stanley back fund that has set fund aside to buy Coronavirus hit firms. Among the firms troubled at this time are building contractors, professional services and other suppliers in the construction industry like Mining.  We have already started reading reports of a family-owned Scottish Building firm that has gone into administration as a result of the lockdown. 

For companies with to huge debts, they are in a precarious situation as interest rates rise. More so, business activities are dwindling as clients suspend planned or ongoing projects. In the coming weeks, we should expect to see some firms in the built environment shut their doors forever.

PICTURE: Bloomberg