One of the businesses in Pietermaritzburg that went up in flames during the civil unrest and looting in July 2021. Picture: REUTERS/SIBONELO ZUNGU
Business rescue was placed on the SA restructuring map in 2011. Before that all directors of distressed companies could do was place their struggling entities into liquidation. A liquidator would in effect wind the company up, terminate employment and distribute liquidation dividends to creditors. It was frequently a negative and disastrous outcome for suppliers to that company, the shareholders and the SA economy.
Directors and management sometimes hang on too long because they are too emotionally tied to the ongoing operation of their companies. As the company goes into a slow spiral of decline and loss-making, directors sometimes have to make hard decisions and look for independent assistance from outside. Either they need to consider a restructuring mechanism like a business rescue, or file for liquidation.
Where this is not possible, a plan can be formulated to deliver a better dividend to creditors than they would have received in a liquidation. The advantage of being able to renegotiate prejudicial contacts, reconfigure the labour force through a controlled retrenchment process, and appoint new management and directors should never be underestimated.
Business rescue gives distressed companies options, including rescue and restructuring of debt. It brings SA into line with the often successful restructuring and turnaround optionality we find in offshore jurisdictions such as the US , Canada , the UK and Australia .
Nope. Business rescue is almost always the prologue to liquidation.
The answer is to have a state owned Central Bank that 100℅ controls its financial and fiscal policies than a twisted racist outfit design to maintain apartheid economic and developmental slavery disguised as Reserve and commercial banks of SA. The clock of justice ticks fast.
Belgique Dernières Nouvelles, Belgique Actualités
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