COMPANIES: Liquidations worry for 2023 as SA businesses run out of leeway with creditors

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Company liquidations in South Africa exploded by almost a third year on year in December, shows the latest data from Stats SA. And 1,902 companies were liquidated in 2022 — a marginal 1.3% decrease (or 1,932) over 2021.

Last week, at the Nedbank Vinpro Information Day, attended for the first time since 2019 in person at the Cape Town International Convention Centre, wine industry representatives spoke frankly about preparations for another tough year, as climate change, a significantly smaller harvest, increased labour costs and the ruinous blackouts — which are disrupting much-needed irrigation for vineyards — are heaping pressure on farmers.

He warned that the self-inflicted damage of rolling blackouts to SA’s economy means the country will miss out on international investment expected from a 2024 global economic upturn.“On a positive note, however, compared to our emerging market peers, South Africa’s inflation rate did not shoot up that quickly and the Reserve Bank remains committed to managing inflation.

Beswick, a former banker, said banks prefer to liquidate sooner rather than later, maintaining that their first loss is their best loss. The problem is that business owners and directors are often in denial about the state of their company, and don’t take action quickly enough to try to save a business.

 

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