Author: Pat Pattinson
What is business rescue? A Business Rescue Practitioner facilitates the rehabilitation of financially distressed organisations. The Restructuring and Rehabilitation of companies in financial distress is on the increase locally and internationally. In line with this, South Africa legislated Chapter 6 of the new Companies Act. The Act introduces “Business Rescue” to the South African business environment. This part of the act allows financially distressed businesses to file for Business Rescue. A licensed business rescue practitioner, assists the business and brings it back to a more stable and profitable entity.
South African companies, whether financially distressed or trading in insolvent circumstances, finaly have a fighting chance to rescue their companies. Without having the stress of creditors knocking on the door insisting on payments. This part of the act offers a moratorium on legal proceedings against any company that is in business rescue. This new part of our company legislation prevents creditors from commencing liquidation procedures against the business. Furthermore it prevents any of its assets being taken by any party.
This company has the opportunity it needs to reorganise and restructure its affairs. It can structure a payment scheme with its creditors, furthermore the business continues to trade as normal. There are much needed jobs saved, and allowing the business to continue trading as an economically contributing entity.
THE PURPOSE OF THE BUSINESS RESCUE PROCEDURE
It aims to do exactly what the name says, by rescuing or rehabilitating a company, which is under financial distress. A “Business Rescue Plan” is drawn up by a provisionally licensed business rescue practitioner possessing the necessary industry knowledge. The practitioner has the capacity to take on the specific business rescue where there are no conflicts of interest with the business. The Rescue Plan will be put to a vote by the creditors. Once successfully voted in, the practitioner must implement and oversee the rescue plan in an attempt to save the company.
Corporate Project Management Services or “CPM Services” are Port Elizabeth based Business Rescue practitioners. We not only operate in the Eastern Cape. Additionaly we have performed projects in East London, George, Bloemfontein, Kirkwood and Cape Town. The main focus of CPM Services is to assist financially distressed businesses, either formally or informally. Formally, assisting businesses to return to profitability, due to utilising the Business Rescue procedures in the Act. Informally assisting company turnarounds outside of the Act.
CPM Service, based in Walmer Port Elizabeth has a proven track record in the field of business rescue and, assists all medium to large businesses within South Africa.