Stephen Grootes speaks to Gareth Cremen, a partner in Cox Yeats’ Business Restructuring, Rescue & Insolvency team, about South Africa’s business rescue framework and how companies end up relying on state funding without any prospect of financial improvement.
Listen to the full interview in the audio player above.
Business rescue & zombie companies
Cremen explains how the purpose of business rescue is to rehabilitate companies that have fallen off financially, and return them to a profitable state, avoiding liquidation. He emphasizes how the process is not meant to keep a failing business on a lifeline with no chance of long-term recovery.
“It was not designed for terminally ill companies or for companies to be put on a life support…