YOU ONLY GET ONE SHOT TO FIX YOUR BUSINESS:
SO BE SURE TO CHOOSE A BUSINESS RESCUE PRACTICIONER WITH A PROVEN TRACK RECORD
The most crucial decision in electing to apply for business rescue is the appointment of a suitably qualified Business Rescue Practitioner.
Zinisi Provides:
A team consisting of several licensed, experienced and senior business rescue practitioners who have a wealth of experience and who will guide you through the decision to apply for business rescue, arrange the required post-commencement funding and ensure the process is successfully implemented and who :
- remain independent throughout the process and in all decision-making, follow a structured framework which is adapted to the actual situation.
- project manage the turnaround, allowing management to get on with the day-to-day job of managing the business.
- aim to align and reach consensus with all stakeholders, including banks, investors, board, management, employees, unions, customers and suppliers.
The team has successfully conducted turnaround assignments for over 25 years of both private companies and JSE-listed entities.
What You Need To Know About Appointing a Business Rescue Practicioner (BRP)
How do I enter business rescue?
In terms of the Companies Act. No. 71 of 2008 (“the Act”), the business rescue process is commenced in two ways, namely :
- The Board of Directors resolves that the company be placed into voluntary business rescue. The resolution is filed with the Companies and Intellectual Properties Commission (CIPC).
- An affected person successfully applying to the High Court to place the company under business rescue.
What are business rescue practitioners?
A business rescue practitioner (“BRP”) is then appointed. The BRP’s role is to investigate the company’s affairs, business, property and financial situation and consider whether there is a reasonable prospect of rescuing the company. He has wide powers during the process and full management control over the company in substitution of the Board.
A BRP is not required to have specific qualifications, although he must be conditionally licenced by CIPC. Obtaining a conditional licence requires that the BRP is a member of one of a number of accredited institutions and has experience in the field of turnarounds and business.
There are three categories of BRP’s, dependent on their experience. Their experience determines the size of the company to which they can be appointed. The appointment of the BRP is the most significant decision taken in applying for the supervision of a company, as it will affect the outcome should he not have the requisite knowledge required in business, accounting and in law.
There are stringent time constraints for the entire business rescue process and non-compliance can result in proceedings being set aside and terminated.
What about post-commencement finance?
Another important requirement for the process, is the ability by the company or the BRP to raise post-commencement finance (“PCF”). This is finance provided to the company to enable it to continue its business whilst the BRP analysis the company’s position and determine the business rescue plan options.
The creation of a post-commencement financing culture in South Africa has not yet gained traction. The South African law provides for security for PCF funders over assets that are not already encumbered.
What happens to the directors?
During the business rescue process, the directors remain in office but are subject to the full management control by the BRP.
How are employees affected?
The rights of employees are not affected by the business rescue process and the appointment of a representative committee of creditors and employees are provided for in the Act.