Business Rescue

The Companies act includes as one of its main objectives to “provide for the efficient rescue and recovery of financially distressed companies, in a manner that balances the rights and interests of all relevant stakeholders.” Chapter 6, Business Rescue, of the Companies Act provides the framework to achieve this.

Business Rescue Strategy

The purpose of business rescue in South Africa is to maximise the likelihood of the company continuing in existence on a solvent basis or to provide an improved return to creditors than would be achieved in liquidation. The key to business rescue is the successful development and implementation, if approved by creditors, of a business rescue plan to rescue the company by restructuring its affairs, business, property, debt, other liabilities and equity. In the event that this is not possible, the business rescue plan needs to be developed in such a way that it should result in a better return for the company’s creditors or shareholders, than would result from an immediate liquidation of the company.

Business Rescue Appointments

John Evans, Philip Reynolds and Iain Stockill have been certified by CIPC to act as business rescue practitioners to distressed companies.

Business Rescue Advisory

RS Advisors is able to advise directors, stakeholders, employees and creditors during all stages of the business rescue process. This includes:

Accepting appointment as business rescue practitioners;
Providing guidance to customers and suppliers on how best to interact with a company in business rescue to protect their interests and maximise outcomes;
Advising creditors in respect of strategic decisions (such as whether or not to vote in favour of a business rescue plan or whether or not to embark on the winding up process as an alternative to business rescue) and protecting their security, particularly when it comes to financing and lending transactions in the business rescue scenario;