UPDATE 2-S.Africa's Group Five in business rescue after lenders pull plug

* Cash crunch worsened after $62 mln claim from Ghana

* Tumbles into business rescue with 5.1 bln liabilities

* Second high-profile to file for bankruptcy protection rescue (Adds analyst comment, detail)

JOHANNESBURG, March 12 (Reuters) - South African builder Group Five filed for bankruptcy protection on Tuesday after lenders pulled funding, threatening the collapse of one of the biggest names in the local construction industry and more than 8,000 jobs.

Group Five, which traces its roots back to the 1970s with the tie-up of five construction companies, has struggled to make money for years in an industry squeezed by stagnant economic growth and a pullback in infrastructure spending by the government and private sector.

Its cash flow problems were exacerbated late last year when Ghana’s Cenpower Generation Company claimed a total of $62.7 million over a building delay to a power plant in the west African country. The project has since been terminated.

“It appears to be reasonably unlikely that the company will be able to pay all of its debts as they fall due and payable within the immediately ensuing six months,” Group Five said.

“As a result, the board of directors of Group Five and G5 Construction have resolved to place each of these companies into business rescue,” it said in a statement.

South Africa’s business rescue law, similar to Chapter 11 bankruptcy protection proceedings in the United States, allows a financially distressed to temporarily delay creditors’ claims against it or its assets. Group Five’s problems threaten jobs cuts in country where about one in five is unemployed. The company employs around 8,000 people.

‘GREAT SHAME’ Group Five’s equity is all but wiped out following years of losses as the company, alongside rivals such as Murray & Roberts and Aveng, struggled to recover from a sharp slowdown in mega projects since the end 2010 FIFA World Cup.

Shares, which were suspended on Tuesday, last traded at 89 cents, giving it a market value of around 100 million rand ($7 million), a dramatic fall from over 5 billion rand in 2009.

Group Five, whose liabilities totalled 5 billion rand at the end of June last year, also told stock holders that “there’s a slim chance for any realisation of value.”

“It’s a great shame because Group Five has been around forever and at one stage was one of the biggest construction companies,” said Wayne McCurrie, a portfolio manager at Ashburton Investments.

“The industry is not totally blameless in all of this. They can’t just say the environment is tough. In the good years, they put on too much capacity, and in the bad years they didn’t cut capacity quick enough.”

Group Five is the second high profile construction company to tumble into business rescue in months, after rival Basil Read filed in the middle of last year with 2.6 billion rand in liabilities.

$1 = 14.2837 rand Additional reporting by Emma Rumney; Editing by David Evans