Edcon's business rescue plan to salvage assets approved
JOHANNESBURG - The business rescue plan aimed at salvaging Edcon’s assets has been approved, business rescue practitioners (BRPs) Piers Marsden and Lance Schapiro, said in a statement yesterday.
The BRPs said that the plan had been approved by the majority of affected parties including, employees, creditors, lenders, and landlords during a creditors meeting held yesterday (Monday). The South African Commercial, Catering and Allied Workers Union (SACCAWU) and the employee’s committee had also supported the plan, said the BRPs.
“Both the employee and SACCAWU representatives expressed support for the business rescue plan, indicating that they choose to back the Business Rescue Plan as it will ensure the preservation of jobs, ensuring future business continuity and ultimate support for the South African economy,” the BRPs.
The business rescue plan for Edcon, the 91-year-old retailer, was published earlier this month and proposed the ‘accelerated sales process’ of Jet, Edgars and the rewards programme Thank U. “The representatives indicated that liquidation is not a consideration and the rejection
of the plan in this current economic and unemployment context would have a detrimental impact on all stakeholders,” said the BRPs.
The BRPs said previously that Edcon has had various offers to purchase the assets and that the company’s survival depended on the sale as no finance had been provided by banks.
The BRPs said yesterday that the sales process was progressing well, with interested parties
currently completing their ‘due diligence’, with ‘binding offers’ set to be received by the end of the month.
“The plan will not only offer greater gains to employees and creditors but would ultimately serve to contribute to the greater economy, the priority remains for us, the protection and balancing of the interests of all stakeholders. Not only will jobs be saved, but employees will also receive better severance, in the likelihood of some employees being retrenched. Creditors and landlords will also be in a better position as they will not only receive better dividends but the sale will also provide them with sustainable customers to ensure continued trading”.