LONDON-based special situations investment firm Blantyre Capital, in partnership with Green Point Capital, a Cape Town-based specialist private credit investment management firm, have tabled an updated offer to the Ster Kinekor business rescue practitioners.
Business rescue practitioner Stefan Smyth told affected persons in a letter yesterday that the non-binding offer was received last Friday and came as significant progress had been made in the due diligence process, which has been substantially concluded.
Smyth also said he received support from affected persons to extend the deadline to January 21, 2022, and aimed to publish the business rescue plan on or before January 21 after taking comfort in its commercial viability and the ability of the deal being implemented.
“We are very pleased to have received an amplified proposal from Blantyre Capital and Green Point Capital and look forward to dealing with the details in the next weeks so as to publish a plan for Affected Parties to subsequently vote on,” said Smyth.
He said the business rescue team was evaluating and negotiating the offer to verify whether the offer was able to be implemented and proceeding to elicit a binding offer.
“The above evaluation includes engagements with the interested party to unpack key parameters and the transaction structure of the updated offer, including the allocation of funds/purchase price considerations,” he said.
Smyth said the business rescue team had continued to engage stakeholders, including landlords with a view to securing new lease agreements. The majority of the landlords had supported the proposals by the business rescue practitioner.
Smyth, however, said that movie attendance numbers were lower in November than a month earlier when James Bond fans flocked to the cinemas for the release of the new James Bond blockbuster. The release of No time to die in October helped stabilise liquidity as attendance exceeded expectations.
“It is still positive to reflect on the recovery from the opening last year, which has assisted to stabilise liquidity. Liquidity preservation initiatives, however, continue to remain in place with cash balances being actively monitored,” said Smyth.
“The recovery trajectory is still expected towards the end of this financial year (in the coming seven months) and is supported by a ‘strong slate’ of film content and further by the increasing vaccination numbers which is anticipated to increase public confidence to return to cinemas and malls again,” said Smyth.
Smyth said he remained of the view that the business could be rescued given the ongoing positive engagements with key stakeholders and advanced funding discussion.
Ster Kinekor filed for business rescue in January this year after the business was decimated by the Covid-19 pandemic. The business took a knock due to the Covid-19 pandemic-induced lockdown restrictions implemented in March last year.
Stefan Smyth is a partner at EY South Africa, where he leads their Africa turnaround and restructuring strategy practice, and was appointed as the business rescue practitioner.
BUSINESS REPORT ONLINE