Tag: business rescue practitioner (BRP)

The 26th week of 2020 will prove decisive in the South African political sphere. The business rescue practitioners appointed to try and resurrect South African Airways (SAA), after three extensions and extensive (and perhaps unlawful) interference by the Department of Public Enterprises (DPE), published the proposed business rescue plan on 16 June. The plan, however, is more of a pipe dream than anything else. The political drama about to unfold would be majestic to behold if it were playing out on television. Unfortunately, this is all but fiction.

The global outbreak of Coronavirus and the subsequent national lockdown announced by President Ramaphosa in March 2020 have undoubtedly impacted many companies.

Certain senior politicians seem to have a misapprehension of how business rescue works in South Africa, particularly as it regards the situation at South African Airways (SAA). Some within the ruling party recently indicated that government will intervene to 'retain the [sic] SAA as a state-owned enterprise'. This cannot legally be done.

The construction industry is unique in that developers, manufacturers, suppliers, contractors and sub-contractors are all in the same cash stream, and when a company at the top end of the chain becomes financially distressed it has a knock-on effect on the rest of the industry.