ELLERINES was applying to be rescued after African Bank Investments Limited (Abil) cut off funding to the furniture retailer because of losses, the lender said yesterday.
“The board of Ellerine Furnishers advised Abil that it has commenced with voluntary business rescue proceedings,” the bank said. “As a consequence of the financial performance a decision has been taken that no further funding would be provided.”
Abil bought Ellerines in 2008 for R9.2 billion, a move intended to help the bank find clients and lift lending. After write-downs and losses, which Abil funded by debt or equity sales because it does not take deposits, it tried unsuccessfully to sell the unit.
“We haven’t been able to get Ellerine right,” Nithia Nalliah, Abil’s acting chief executive, said yesterday. – Bloomberg