Out of the Covid-19 crisis we might see opportunities savvy investment
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Recently published statistics by the Companies and Intellectual Property Commission (CIPC) reflect 157 new filings for business rescue in the period April to August. These have affected the public sector (four), the private sector (122) and close corporations (31). The busiest regions for filings have been Gauteng (44%), Western Cape (13%), Eastern Cape (4%) and KwaZulu-Natal (9%).
According to the CIPC, the industry sectors that have been hardest hit are manufacturing (21), wholesale and retail (18), accommodation and food services (18), arts, entertainment and recreation (13), real estate (12), agriculture, forestry and fishing (11), transportation and storage (nine), construction (five), financial and insurance activities (five) and mining (three).
Clearly filing for business rescue is industry agnostic, affecting almost every sector in the SA economy. The aim of business rescue is to restructure the affairs of the company in such a way that either maximises the likelihood of the company continuing in existence on a solvent basis or results in a better return for the creditors of the company than would ordinarily result from the immediate liquidation of the company.
The fallout from the Covid-19 pandemic will continue to be felt in the months ahead, both globally and in SA. Even with the gradual lifting of the lockdown (now to level 2), there will be both short and long-term economic implications as South Africans continue to grapple with an effective way to allow the economy to be kick-started in the near term.
Questions are continually being posed: will a recessionary economic climate be the new norm? What restructuring tools are available to promote businesses and jobs? How do directors, business leaders and professionals deal with the hard challenges of getting their businesses back on their feet, by reinventing themselves and becoming players in the local economy once more?
The imperative of ensuring the survival of the distressed entity might just feed into opportunities for those cash-rich investors and where strong balance sheets might allow for the purchase of distressed companies, their assets and/or businesses. Out of the pandemic crisis we might see opportunities for sound and savvy investments. This would in turn lead to the resuscitation of the struggling SA corporate, which could result in a much-needed boost for the SA economy. The objective being a more sustainable outcome for all stakeholders, creditors, employees and, most of all, the SA economy.
We have already seen significant fallout caused by the harsh ...
According to the CIPC, the industry sectors that have been hardest hit are manufacturing (21), wholesale and retail (18), accommodation and food services (18), arts, entertainment and recreation (13), real estate (12), agriculture, forestry and fishing (11), transportation and storage (nine), construction (five), financial and insurance activities (five) and mining (three).
Clearly filing for business rescue is industry agnostic, affecting almost every sector in the SA economy. The aim of business rescue is to restructure the affairs of the company in such a way that either maximises the likelihood of the company continuing in existence on a solvent basis or results in a better return for the creditors of the company than would ordinarily result from the immediate liquidation of the company.
The fallout from the Covid-19 pandemic will continue to be felt in the months ahead, both globally and in SA. Even with the gradual lifting of the lockdown (now to level 2), there will be both short and long-term economic implications as South Africans continue to grapple with an effective way to allow the economy to be kick-started in the near term.
Questions are continually being posed: will a recessionary economic climate be the new norm? What restructuring tools are available to promote businesses and jobs? How do directors, business leaders and professionals deal with the hard challenges of getting their businesses back on their feet, by reinventing themselves and becoming players in the local economy once more?
The imperative of ensuring the survival of the distressed entity might just feed into opportunities for those cash-rich investors and where strong balance sheets might allow for the purchase of distressed companies, their assets and/or businesses. Out of the pandemic crisis we might see opportunities for sound and savvy investments. This would in turn lead to the resuscitation of the struggling SA corporate, which could result in a much-needed boost for the SA economy. The objective being a more sustainable outcome for all stakeholders, creditors, employees and, most of all, the SA economy.
We have already seen significant fallout caused by the harsh ...