Ultimately, Edcon has run out of money, says Vianello, and to save it, a lot of money needs to be injected into it — but most companies and investors are financially constrained because of the effect of measures taken to limit the spread of Covid-19.
The company says it was unable to pay its suppliers for both March and April. Paying April salaries will require assistance from the UIF’s programme. He says the company has expenses, no money to buy goods and a debtors book that needs to be collected on. Another problem, adds Vianello, is that when a company announces business rescue, customers don’t rush to pay their accounts.
Another factor is the increase in the unemployment rate, meaning people will not have enough money to buy anything beyond essential items or those needed for survival. He added that even if that is the case it’s better to let other stores fall off because demand is low. He believes Edcon could be saved if the two shareholders, the PIC and the UIF, come to the party and put more money into it.
Going under business rescue is as you say supposed to be a time to see if the practicioners can rescue the business. The biggest problem is that the practicioners are damn expensive. Are they actually effective?
Edcon failed so many times before lockdown. Don't encourage their shenanigans
Let's buy it and hand it over to blacks in retail. Transformation is important.
And delay paying their creditors
These so called business practitioners are good for nothing!
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