Corporate Renewal Solutions Blog

King III Committee on Governance: Business Rescue Subcomittee appointed

noreply@blogger.com (Corporate Renewal Solutions) — Fri, 13 Jul 2007 05:21:00 +0000

King III Commission on Corporate Governance

Members of the Business Rescue Subcommittee are:

Professor David Burdette (University of Pretoria) (Convener).
Professor Anneli Loubser (University of South Africa).
Martin Leigh (Standard Bank).
Lawrence Ngobeni (Safrust).
Patrick Daly (Daly Maqubela Oliphant).
Judge Ralph Zulman.
Jan van der Walt (Corporate Renewal Solutions).

This turnaround news flash was brought to you by CRS Turnaround Management - turnaround management consulting firm rescuing distressed companies and improving results of underperforming companies in South Africa.

Feedback on Department of Trade and Industry workshop on Chapter 6 of the Companies Bill (Business rescue)

noreply@blogger.com (Corporate Renewal Solutions) — Tue, 26 Jun 2007 05:21:00 +0000

If the views of the business rescue workshop participants will be taken into account, it may lead to key changes in the next draft of Chapter 6.

Participants included the following:

Tshepo Mongalo, Chairperson and Project Manager: Company Law Reform.
Linda van Dieman: Assistant Director: Department of Trade & Industry.
Bongi Mncube, Team Assistant: Department of Trade & Industry.
Mpheane Lepaku, Deputy Director: Department of Trade & Industry.
Nica Rakau, Legal Unit Head, National Union of Mineworkers (an affiliate of COSATU).
Janek Wilimiec, Manager: Legal Services, FEDUSA.
Justice Basheer Waglay, Judge of the Cape High Court.
Shibishi Samuel Maruatona, Director, Business Leadership South Africa.
Sisa Njikelana, Member of Parliament of the Republic of South Africa and of the Portfolio Committee on Trade and Industry of the National Assembly.
Tebogo Marishane, National Treasury.
Ashley Benjamin, Official of FEDUSA, Durban.
Fachmy Abrahams, National Collective Bargaining Officer, SACTWU, (an affiliate of COSATU).
Prakashnee Govender, Policy Researcher of COSATU.
Jenny Meyer, Group Company Secretary, Anglo Platinum Ltd.
Karin Rathbane, Associate, Deloitte, Johannesburg.
John Evans, Principal, Deloitte, Pretoria.
Kgosi Monaisa, Principal Company Secretarial Advisor, SASOL Ltd.
Themba September, Chairman, Association of Business Administrators in South Africa (ABASA).
Werner Joubert, Legal Credit, Rand Merchant Bank.
David Burdette, Professor, University of Pretoria.
Kevin Cron, Director, Deneys Reitz, Johannesburg (Representing the Banking Association).
James Davies, Partner, Webber Wentzel Bowens, Johannesburg.
Adam Harris, Council, Bowman Gilfillan.
Rory Voller, Director: Legal Services, Companies & Intellectual Property Registration Office.
Trevor Murgatroyd, Head: Business Support, ABSA.
Martinus Cronje, Researcher, South African Law Reform Commission.
Mervyn Swartz, Owner, MI Swartz & Associates.
Robin Taggart, Manager, NEDBANK.
Robert Driman, Director, Deneys Reitz.
Anneli Loubser, Professor, University of South Africa.
James Galloway, Manager, KPMG.
Kevin Cochran, Legal Adviser, NEDBANK.
Callie Lombard, Acting Head: Legal Business Support, ABSA.
Jan van der Walt, Risk Manager, FNB.
Steve Yardley, Franchise Manager, Woolworths.
Christiaan Lamprecht, University of Stellenbosch.
Goolam Harneker, Finance Manager, Woolworths.
Martin Leigh, Director, Standard Bank.
Jean du Plessis, Head: Workout and Restructuring, Industrial Development Corporation (IDC).
Lawrence Ngobeni, Director, SAFTRUST.
Jan van der Walt, CEO, Corporate Renewal Solutions.
Nicky Lala Mohan, General Manager, Banking Association.
Kenneth Shibambo, M.S.O., SASBO.
Siphiwo Gangca, Labour Market Co-ordinator, NACTU.
Victor Mabuli, Association for the Advancement of Black Accountants in South Africa (ABASA).
Jill Oliphant, Attorney, DMO Attorneys.
Thavi Padiachy, Director, African General Equity Financial Solutions.
Sechaba Moletsane, Director, Tsebo Consulting.

The following organisations were represented:

The Department of Trade and Industry.
Congress of South African Trade Unions (COSATU).
The Federations of Unions of South Africa (FEDUSA).
The Standing Advisory Committee on Company Law in South Africa (SACCL).
Business Unity South Africa (BUSA).
Portfolio Committee For Trade & Industry of Parliament of the Republic of South Africa.
National Treasury.
Southern African Clothing and Textiles Workers Union (SACTWU).
National Union of Mineworkers (NUM).
Anglo Platinum Ltd.
Deloitte.
Sasol Ltd.
Association of Business Administrators of South Africa (ABASA).
Joubert & Robertson.
University of Pretoria.
Banking Association of South Africa (BASA).
Webber Wentzel Bowens (WWB).
Association of Insolvency Practitioners in South Africa (AIPSA).
Companies & Intellectual Property Registration Office (CIPRO).
ABSA Bank Ltd.
Department Of Justice & Constitutional Development.
Association of Chartered Secretaries & Administrators in South Africa (ICSA).
NEDBANK Ltd.
Deneys Reitz.
University of South Africa (UNISA).
KPMG.
FNB Ltd.
WOOLWORTHS.
Turnaround Management Association - Southern Africa (TMA-SA).
Standard Bank of Southern Africa Ltd.
Industrial Development Corporation (IDC).
Corporate Renewal Solutions.
SASBO.
National Council of Trade Unions (NACTU).
African General Equity Financial Solutions.
Tsebo Consulting (Pty) Ltd.

The dti prepared a feedback document on the business rescue workshop, which it distributed on Monday 25 June. However, the dti requested that the feedback as well as documentation distributed at the workshop be kept out of the public domain for the time being.

Corporate Renewal Solutions, as a participant in the ongoing consultation process with government regarding new business rescue legislation, wishes to respect government's wishes and this web site will therefore not comment on proceedings until such time as government has released official information in this regard.

For complete information, see Turnaround events.

Department of Trade and Industry workshop on Chapter 6 of the Companies Bill (Business rescue)

noreply@blogger.com (Corporate Renewal Solutions) — Tue, 22 May 2007 03:20:00 +0000

Invitees

This closed workshop on Monday 11 June is for those parties and individuals that were invited by dti based on their submissions of comments on draft legislation received by 30 March 2007.

Issues to be discussed

Should the South African Business Rescue regime be more ‘creditor friendly’ (in the manner of the insolvency regime) or more ‘debtor friendly’ (in the manner of turn around regimes in many other jurisdictions)?
Who or what parties should be entitled to institute the business rescue proceedings?
What is the appropriate triggering mechanism for a business rescue process: Is it insolvency (or imminence of insolvency), an insolvency event, or some earlier other event/circumstance and, if the latter, how should this be defined?
How can the process provide for adequate and meaningful consultation with stakeholders before a final decision is made to proceed with formal business rescue plan?
What is the proper role and place of the supervisor? What qualifications, if any, are needed? What, if any, supervision or regulation of supervisors is needed? To whom does the supervisor owe a duty? Should the Bill permit performance compensation of the supervisor?
Is it reasonable or necessary to designate some creditors as ‘independent’ for the purpose determining their voting rights in the process?
What should the position of providers of post-commencement financing be relative to pre-commencement creditors? Should the Bill compel suppliers, etc, to continue supplying the business under business rescue and, if so, what should the position be?
If a business rescue calls for a fundamental transaction (i.e. scheme of arrangement, sale of substantially all the assets or undertaking, merger or amalgamation), should that transaction be exempt from Takeover Regulation Panel or continue to be subject to Panel supervision in addition to business rescue approval regime?
To the extent that business rescue is to be judicially scrutinised, should it rely on the High Court or is a Specialist Court/Tribunal preferable and, why?
Should there be a role for the current section 311 compromises in business rescue process?

For complete information, see Turnaround events.

This turnaround news flash was brought to you by CRS Turnaround - turnaround management consulting firm rescuing distressed companies and improving results of underperforming companies in South Africa.

Where are liquidation statistics heading to?

noreply@blogger.com (Corporate Renewal Solutions) — Thu, 26 Apr 2007 03:31:00 +0000

Click on the thumbnail for an enlarged view of the most recent liquidation statistics (March 2007).

After a surge towards the end of 2006 as a result of past interest rate increases, compulsory company liquidations dropped significantly to only 4 per month during the first three months of 2007 despite expectations of an increased level during 2007. With compulsory company liquidations serving as a lagging indicator of turnaround activity, it indicates that the turnaround management industry in South Africa is off to a slow start in 2007.

Turnaround educational events in May 2007

noreply@blogger.com (Corporate Renewal Solutions) — Wed, 25 Apr 2007 00:10:00 +0000

Three events are taking place in May 2007 that can be attended to further your professional development in turnaround.

Business rescue legislation panel discussion on 3 May 2007 at Deloitte

The programme and panelists for the two hour programme are taking shape:

Opening remarks by the Chairman Judge Ralph Zulman.
Panelists (about 10 minutes each)
- The business rescue process (commencement, supervisor appointment, business rescue plan publication and approval, critical path, termination) by Jan van der Walt.
- The supervisor (who is he/she?; need for regulation, admission criteria, exam, etc.) by John Evans.
- Impact on banks (creditors not appointing the supervisor, shift in decision-making power away from secured creditors, Banks' secured lending base will be eroded, etc.) by Martin Leigh.
- Impact on the liquidation industry by Hans Klopper.
- The academic perspective (debtor-friendly company business rescue legislation vs. creditor-friendly present and future insolvency legislation, etc. by David Burdette.
Floor discussion - questions to panelists and open debate. Keith Braatvedt is the additional panelist to answer legal questions.
Closure by Chairman.

AIPSA conference on the Companies Bill 11 May 2007

This 5-hour programme also covers draft business rescue legislation by Prof. David Burdette.

Programme: Managing a Turnaround 10 - 14 May at Wits Business School

This 5-day programme will teach you all you need to know about turnaround of underperforming and distressed businesses.

Corporate turnaround and rescue strategies workshop 28 - 29 May 2007

The purpose of the two day workshop is to give an overview of current developments in corporate turnaround and restructuring in South Africa and to further develop rescue strategies for organisations facing insolvency.

For complete information, see Turnaround events.

Business rescue key success factors

noreply@blogger.com (Corporate Renewal Solutions) — Wed, 18 Apr 2007 06:32:00 +0000

In a previous post Draft business rescue legislation - main features the main characteristics of new business rescue law was summarised.

This post is a follow-up dealing with key success factors for business rescue in South Africa.

When to rescue which businesses

Avoid the need for business rescue

The earlier each stage in the sequence of management-led correction - informal creditor workout - business rescue starts on the timeline of financial distress, the better the chances of successful business rescue should the first two processes fail, or the better the chance that formal business rescue can be avoided in the first place.

In practice, however, management-led correction and informal creditor workouts already suffer from late starts, or they take too long before taking the shape of a serious turnaround intervention.

Expedite business rescue if the need for it cannot be avoided

The reason for the unnecessary high failure rate of business rescue internationally is that it is deemed to be a measure of last resort - often postponed until the company is in an advanced stage of distress. Directors and managers may resist business rescue since they fall under the supervision of a third party (the Supervisor in terms of Chapter 6 of the Companies Bill, 2007 in South Africa) in charge of business rescue, and they fear the negative impact on the business of the stigma of insolvency. In countries with a legacy of English law like SA, business rescue taking place under laws carries the stigma of insolvency, leading to loss of prestige, staff and customers. This may lead to reckless or insolvent trading. Moreover, the cost of formal business rescue is such that management-led correction and informal credit workout, which are attempted first, may be prolonged too much before placing the business under supervision. The late timing of business rescue commencement represents a major obstacle to its viability.

Rigorous application of laws against reckless / insolvent trading

Although the current Companies Act provides for personal liability of directors in certain limited cases, section 93 of the new Bill goes all the way by making directors personally liable to companies and others who suffered losses because of misleading financial statements, untrue annual reports and reckless carrying on of a company’s business.

In addition to personal liability, section 215 of the Bill makes reckless management and failure to comply criminal offences subject to 10 years imprisonment and high fines.

Pre-packaged business rescue rather than free fall business rescue

If business rescue is left too late, it will present the supervisor with the most difficult scenario possible - that of free fall business rescue.

Free fall business rescue refers to placing a company under supervision as a last resort when it has run out of cash and cannot meet its creditor obligations anymore.

Such cases are normally dead on arrival. By this time the situation has deteriorated so far that the realm of the "deep turnaround" has been entered into:

No borrowing capacity.
Banks will not lend even if there is borrowing capacity - making it difficult to get post-commencement finance.
Difficult, if not impossible, to obtain private equity funding.
Suppliers stopped supplying, tightened up on credit terms and/or asked for up front payment.
Key clients stopped buying or hedged their bets by shifting their purchases to more stable competitors.
Key staff is long gone to better situations or preparing to move.

Overseas experience shows that business rescue attempts once already insolvent and out of cash has a lower success rate than those that started earlier.

In the USA the free fall approach to Chapter 11 of old is more and more replaced by pre-packaged Chapter 11. The same trend is evident in the UK.

Pre-packaged business rescue involves timeously devising a sale, or a business rescue plan inclusive of financial restructuring and agreements for post-commencement finance, as well as agreements with all affected persons, when it is clear that there is not enough time to turn the company around before insolvency has set in.

This takes place prior to the company being placed under supervision when it still has borrowing capacity, and intact management, systems, and supplier and customer relations.

The company is then placed under supervision before or when insolvency has set in to obtain the legal benefits such as the moratorium on the rights of claimants against the company or in respect of property in its possession.

The resultant business rescue cost and total cost of the overall exercise is much cheaper, business rescue takes shorter, and the success rate and claim holder recovery rate is higher than free fall business rescue.

Since the supervisor must be independent of the company, and cannot appoint advisors to the supervisor or to the company that are not independent of the supervisor and the company, it would seem that advisors involved in preparing the pre-packaged business rescue cannot become the supervisor, nor can they be appointed by the supervisor (but they can be appointed by management).

It seems that statutory recognition to translate out-of-court practice into the legal business rescue framework in terms of pre-packages solutions and recognition of the workout advisors as "independent advisors" will be beneficial to business rescue outcomes.

Avoid attempting the business rescue of lost cases

In statistical terms, the purpose of business rescue is to avoid making a Type 1 error, which is liquidating potentially viable businesses that should be rescued.

Conversely, Type 2 error refers to attempting to rescue lost cases that should be liquidated.

The cost of Type 2 error is the cost associated with the unsuccessful rescue attempt plus the cost of subsequent liquidation.

Supervisors need to be trained and educated to recognise hopeless cases early on during the business rescue process to enable them to speedily terminate business rescue proceedings allowing liquidation to proceed without delay.

An effective business rescue legal framework and judicial infrastructure

South Africa has the ideal opportunity to craft and formalise the most suitable modern business rescue regime.

Consultation

This far the dti distributed the draft legislation for comment and held a business rescue panel discussion at the Companies Bill Conference 19 - 20 March 2006.

"The Department of Trade and Industry has started a consultation process with industry. In the period leading up to the adoption of the draft business rescue legislation, there will be intensive engagement with all stakeholders. This will include the evaluation of public comments, the redrafting of difficult sections of the law, amendments to the technical omissions and the resubmission to key stakeholders for further input."

The rest of the promised consultation process has not been clarified yet, but industry wish to engage with government with regard to its questions, clarifications sought and contributions made.

Promotion of debtor-friendly legislation

The debtor-friendly nature of the draft legislation is foreign the creditor-friendly culture and experience of South Africa, with vested interests in a creditor-friendly approach.

The dti needs to produce an Explanatory Memorandum and launch further initiatives to sell the merits of debtor-friendly legislation to industry.

Alignment of debtor-friendly company business rescue legislation with creditor friendly insolvency legislation

To make Chapter 6 work, legal convergence and uniformity are required between the debtor-friendly Companies Act and creditor-friendly insolvency legislation.

An effective court system, including a specialised statutory tribunal for business rescue

Experience commercial judges must be available at short notice.

The normal court system is unlikely to be appropriate for business rescue. What is required is a specialised statutory tribunal in which creditors will have confidence.

Availability of experienced commercial judges

Experience commercial judges must be available at short notice.

Regulation of supervisors - ABASA

ABASA - Association of Business Administrators of South Africa was established as in industry proposed business rescue regulatory body in 2004, and has applied to government for official recognition.

ABASA has set appropriate admission criteria for supervisors as discussed under "Need for regulation of supervisors" on the business rescue legislation page, and will ensure that its members carry out their duties in a professional and ethical manner.

Effective business rescue industry support

Organised turnaround industry - TMA-SA for networking, knowledge, education and promotion

The Turnaround Management Association - Southern Africa (TMA-SA) promotes the turnaround industry, and serves as forum for turnaround professionals of all disciplines to associate for purposes of information exchange, networking, education, and raising standards in the turnaround industry.

The members of TMA-SA are active in management correction, informal creditor workout and business rescue (the first 3 stages timeline of financial distress).

TMA-SA has accepted the challenge to make new business rescue legislation work in South Africa.

TMA-SA will participate in the consultation with government about the draft business rescue legislation, will educate its members about business rescue and will collect and disseminate information about business rescue.

Education of supervisors

Based on the Certified Turnaround Practitioner example, a supervisor should pass an exam consisting of 3 modules:

Turnaround management.
Financial, managerial and tax accounting.
Insolvency and business rescue law.

As discussed as discussed under "Supervisor exam " on the business rescue legislation page, TMA-SA can assist in setting up such an exam, either as a customised South African version of the international CTP exam, or as a home-grown initiative.

Turnaround finance

Companies entering business rescue proceedings do so because they have or will run out of cash.

Post-commencement finance as envisaged in Section 138 of the Companies Bill, 2007 is unlikely to be of much practical value in free fall business rescue, since by that time the distressed company will invariably already be without borrowing capacity.

Even troubled companies which enter pre-packaged business rescue early enough in the process may find it hard to find lenders.

Accordingly, there remains a strong need for a more active turnaround private equity industry in South Africa that not only invests in underperforming businesses and businesses requiring financial restructuring, but also invests in distressed businesses too.

It is envisaged that the business rescue legislation will stimulate the market for distressed situation private equity.

Government can also play a role through the establishment of a turnaround fund via the National Empowerment Fund for instance.

Business rescue scorecard

Whilst it is very difficult to find statistics in this regard, the success rate of business rescue overseas is lower than may be expected - less than 47% in the UK for instance (see business rescue).

Whilst its new business rescue legislation will make a major impact on successfully rescuing troubled companies, South Africa runs the risk of creating false expectations of new business rescue legislation being a panacea for its liquidation problems.

Moreover, there is a need to learn more about business rescue outcomes to enable lawmakers and turnaround practitioners to devise new and improved approaches and methodologies to increase the success rate of business rescue in future.

We therefore call for a scorecard to measure and the track the success of all business rescue attempts:

Number and turnover of businesses that enter and survive business rescue.
Percentage of jobs retained as a result of business rescue.
Claim holder recovery as a result of business rescue.
Cost of business rescue.
Duration of business rescue.
Business rescue success outcome – turnaround or sale.
Pre-packaged or free fall.

For more information read Key success factors for business rescue in South Africa.

Draft business rescue legislation - main features

noreply@blogger.com (Corporate Renewal Solutions) — Fri, 30 Mar 2007 09:03:00 +0000

Main features of draft business rescue provisions as contained in Chapter 6 of the Companies Bill, 2007

Business rescue means proceedings to facilitate the rehabilitation by its management of a company that is insolvent, or may imminently become insolvent - section 130(1)(b).

Largely self-administered by the company.
Management of the affairs, business and property of the company is under independent supervision, within constraints - section 130(1)(b)(i).
Subject to court intervention at any time on application by any of the stakeholders.
A temporary moratorium on the rights of claimants against the company or in respect of property in its possession - section 130(1)(b)(ii).
The development and implementation of a plan to rescue the company through restructuring of its affairs, business, property, debt and other liabilities, and equities - section 130(1)(b)(iii).

Debtor-friendly:

Very low hurdle rate for the debtor to commence business rescue proceedings:
- Ordinary resolution as opposed to a special resolution in order to enter the procedure (as opposed to a special resolution required for winding-up) or a decision by the board of the company – section 132(1).
While it is relatively easy for a company to enter the business rescue proceeding, the hurdle that an affected person (shareholder, creditor, trade union or unrepresented employee) has to clear in order to have the proceeding set aside is extremely high:
- A court application is required, which involves high costs and other risks – section 133(1).
- The business rescue proceeding will only be set aside if there is “overwhelming evidence” supporting the applicant’s allegation that there is no reasonable prospect of rescuing the company – section 133(5)(a).
The shareholders or board can appoint the supervisor in charge of business rescue – section 132(3)(b):
- Difficult for creditors to overturn this appointment in court – section 133(1)(b).
- The company and the supervisor being able to enter an agreement regarding the remuneration payable to the supervisor – section 146.
- Simple majority required by the supervisor to obtain authorisation to do most things.
- The supervisor may authorise the company to borrow in priority of existing obligations in order to fund ongoing business activities - section 143(1)(c).
- Committee of employees, or of creditors that may consult with the supervisor in charge of business rescue about any matter relating to the business rescue proceedings, but that may not direct or instruct the supervisor – section 152.
- The simple majority required in order to accept a business rescue plan – section 155.
Directors and management continue to perform and exercise their functions and powers (albeit that the supervisor can remove management from office) – section 143.
Suppliers are to continue to supply on the same terms and conditions - section 139.

Ranking of claims

The supervisor's remuneration and other business rescue cost rank highest, then unpaid monies owed to employees in the order in which they were occurred, then secured claims, then post-commencement finance in the order in which they were occurred, then unsecured claims - section 138. (Does Sars now become a unsecured rather than a preferred creditor?).

Duration

Although a detailed timeline is set, the time limit on the duration of business rescue can be extended through court or creditor approval - section 135.

Stakeholders

Recognition of the interests of shareholders, creditors and employees, and provision for their respective participation in the development and approval of a business rescue plan:
- Creditors, funders, trade unions, shareholders and employees must elect a representative forum, which must then decide whether a business rescue plan presented by the supervisor is viable.
Protection of the interests of workers by:
- Recognising them as creditors of the company with a voting interest to the extent of any unpaid remuneration,
- Requiring consultation with them in the development of the business rescue plan,
- Permitting them an opportunity to address creditors before a vote on the plan, and
- According them, as a group, the right to buy out any dissenting creditor who has voted against approving a rescue plan.
- Ranking employee claims, in the event of a liquidation, highest after the costs of business rescue, above secured claims, post-commencement finance, and unsecured claims - section 138.
- Not allowing retrenchment - section 139.

For more information read Business rescue.

The implications of and key success factors for successful business rescue in South Africa will be addressed in blogs to follow.

Online business rescue legislation discussion forums launched

noreply@blogger.com (Corporate Renewal Solutions) — Fri, 23 Feb 2007 01:25:00 +0000

Go to the Business rescue discussion forums.

Purpose of the business rescue discussion forums

Initial purpose

These forums deal with draft business rescue legislation as contained in Chapter 6 of the Companies Bill, 2007.

The initial purpose of the forums is to solicit comment and discussion for purposes of generating feedback to the dti on the draft legislation before the deadline of 19 March 2006.

All registered forum members share in the information and opinions posted in the open forums, which cover business rescue information sources, discussion of the Bill in general, and separate discussions of each section of the Bill.

The Turnaround Management Association - Southern Africa (TMA-SA) and Association of Business Administrators of South Africa (ABASA) have established their own closed forums for their Working Committees.

Other organisation are welcome to establish their own private forums - simply contact the Administrator from within the forums to set this up.

Ongoing purpose

After the dti feedback deadline, the purpose of the forums will be:

To serve as a debating forum for all those interested in the legislation - turnaround and insolvency practitioners, creditors such as banks, lawyers, government, judiciary and academics.
Ongoing information exchange and building of a body of knowledge that is shared by all forum members.
Helping to educate and prepare the business rescue industry about legal implications of the draft legislation.

The business rescue legislation discussion forums are open to all

Anybody with an interest in the business rescue provisions contained in Chapter 6 of the Companies Bill, 2007 can register.

Once in the Business rescue discussion forums, please read the sections on "About the business rescue legislation forums" before registering and posting.

You are welcome to register as a forum member if you are affected by or interested in draft business rescue legislation as contained in Chapter 6 of the Companies Act, 2007.

Anybody can register - you don't need to belong to an association or professional body.

Simply click on the "Register" icon at the top of the forums page for a simple registration process that will enable you to access the forums. There is no charge.

Note that these forums will be of little value if members merely read the posts of others. Therefore, please participate by posting your own opinions and questions, and replying to posts of others!

Who should be interested in registering?

Service providers to distressed companies - turnaround and insolvency practices, consultants, lawyers, accountants ("Role of the supervisor" and "Development of the business rescue plan").
Lenders to distressed companies - banks ("Rights of creditors", "Post-commence finance").
Investors in distressed companies - private equity investors ("Rights of shareholders").
Labour unions and employee organist ("Rights of employees"). Government and judiciary. Academics / faculty and students.

What can be discussed in the business rescue legislation forums?

There are a number of categories containing either open or closed forums:

Open forums - anybody can view forum topic headings, and can read topics, but only registered forum users can post topics and reply to posts:
- Forums in the category "About the business rescue legislation forums", which explains how to register and use the forums.
Forums for registered users - anybody can view forum topic headings, but only registered forum members can read topics, post topics and reply to posts:
- Forums in the category "Business rescue legislation information sources" where one can download the Companies Act, 2007, and read about the timeline of financial distress, business rescue, and business rescue legislation.
- Forums in the category "Business rescue legislation: General discussion", which is for higher level discussion of the business rescue legislation in general (as opposed to the discussion per individual section of Chapter 6 of the Companies Bill, 2007 which follows thereafter).
- Forums in the category "Business rescue legislation: Part A - Business rescue proceedings" which contains individual forums for sections 130 - 140 of the Bill.
- Forums in the category "Business rescue legislation: Part B - Supervisor's functions and terms of appointment" which contains individual forums for sections 141 - 146 of the Bill.
- Forums in the category "Business rescue legislation: Part C - Rights of affected persons during business rescue" which contains individual forums for sections 147 - 152 of the Bill.
- Forums in the category "Business rescue legislation: Part D - Development and approval of business rescue plan" which contains individual forums for sections 153 - 157 of the Bill.
Closed forums - anybody can view forum topic headings, but only members of the closed forums can read topics, post topics and reply to posts - these forums are private and secure:
- Turnaround Management Association - Southern Africa forums - for private use by its Business Rescue Legislation Working Committee.
- ABASA - Association of Business Administrators of South Africa forums - for private use by its Executives.

Go to the Business rescue discussion forums.

Draft new business rescue legislation released for South Africa

noreply@blogger.com (Corporate Renewal Solutions) — Mon, 12 Feb 2007 01:08:00 +0000

Draft company business rescue legislation was published on 12 February 2007 as Chapter 6 of the Companies Bill, 2007.

Chapter 6 consists of 4 parts:

Part A - Business rescue proceedings.
Part B - Supervisor's functions and terms of appointment.
Part C - Rights of affected persons during business rescue.
Part D - Development and approval of the business rescue plan.

Business rescue will be largely self-administered by a company under independent supervision within constraints, but subject to intervention by a court at any time on application by a stakeholder.

Main features of the new business rescue legislation

In accordance with the reform objectives and specific goals, Chapter 6 proposes replacing the existing regime of judicial administration of failing companies with a modern business rescue regime:

Largely self-administered by the company.
Management of the affairs, business and property of the company is under independent supervision, within constraints set out in the chapter.
Subject to court intervention at any time on application by any of the stakeholders.

In particular, the Chapter recognises the interests of shareholders, creditors and employees, and provides for their respective participation in the development and approval of a business rescue plan.

Notably, the chapter protects the interests of workers by:

Recognising them as creditors of the company with a voting interest to the extent of any unpaid remuneration,
Requiring consultation with them in the development of the business rescue plan,
Permitting them an opportunity to address creditors before a vote on the plan, and
According them, as a group, the right to buy out any dissenting creditor who has voted against approving a rescue plan.

Persons wishing to comment on the proposed Bill may do so by addressing initial comments in writing no later than 19 March 2007, to:

Ms. Linda Van Dieman

CCRD, the dti

Pretoria

Fax No: (012) 394 2536

Email: Linda@thedti.gov.za

Want to learn more about business rescue?

Go to Business rescue to read about this 3rd stage in the timeline of financial distress and a critical assessment thereof.

Click on the thumbnail below for a popup enlarged view of the timeline of financial distress diagram.

Click on Timeline of financial distress table for a popup table explaining the four stages.

Go to Key success factors for business rescue in South Africa for an overview of what is required to make new business rescue legislation work in South Africa.

Download Business rescue - Chapter 6 of the Companies Bill, 2007 (113k)

TMA-SA's presentations to government on improving turnaround and business rescue in South Africa

noreply@blogger.com (Corporate Renewal Solutions) — Sun, 19 Nov 2006 15:06:00 +0000

On 6 November 2006 Ntombi Langa Royds and Jan van der Walt of the Turnaround Management Association - Southern Africa made presentations to:

Tshepo Mongalo (Project Manager: Company Law Review) of the Department of Trade and Industry.
A number of directors of National Treasury.

on Improving turnaround and business rescue in South Africa - how government can contribute, and how TMA-SA can assist.

The presentation covered the following:

Turnaround situations.
Causes of distress.
Turnaround strategies.
Turnaround industry in South Africa.
Turnaround industry driving forces.
Turnaround industry constraints.
Government interventions - new business rescue legislation, new Companies Act, business rescue funding, labour legislation, taxation.

Email received from National Treasury: "Thank you for taking the time to meet with us - we were very impressed with the quality of the presentations. I trust that we will work well together on a going forward basis and that we can play a part in assisting the turnaround of South African businesses".

National Treasury has requested TMA-SA to conduct a survey regarding the chances of success of the different stages in the timeline of financial distress. The survey is being formulated.

In addition, National Treasury has requested TMA-SA to be available to play a facilitating role between a number of government departments.

The Department of Trade and Industry announced that new business rescue legislation will be promulgated in October 2007. The dti also requested TMA-SA to make a proposal regarding business rescue legislation, including certification of supervisors.

This turnaround news flash was brought to you by Turnaround Solutions - turnaround management consulting firm rescuing distressed companies and improving results of underperforming companies in South Africa.

Myths in corporate transformation and turnaround - by Dr. Mike Teng

noreply@blogger.com (Corporate Renewal Solutions) — Sat, 30 Sep 2006 19:21:00 +0000

Dr. Mike Teng placed an interesting post that is well worth reading on his blog Corporate Turnaround titled Myths in Corporate Transformation and Turnaround.

These myths are:

Myth 1: Not vulnerable to financial crisis.

Myth 2: Nothing has gone wrong (self-denial).

Myth 3: Primary role of a turnaround manager is to cut cost to the bone.

Myth 4: It is a safe route to success doing business in Asia.

Myth 5: Textbook knowledge will suffice in helping executives manage a corporate turnaround situation.

Myth 6: “Firing shall continue till morale improves.”

Myth 7: Common sense alone will suffice.

New debtor-friendly business rescue legislation for South Africa

noreply@blogger.com (Corporate Renewal Solutions) — Thu, 31 Aug 2006 10:46:00 +0000

South Africa's business rescue legislation is relatively antiquated compared to progressive overseas countries.

Government has decided to take action, and after a number of past initiatives (see history of business rescue legislation reform in South Africa), new business rescue legislation will now be contained in Chapter 6 of the new Companies Act.

It is understood that in October 2005 a creditor-friendly proposal was made by Professor David Burdette based on the UNCITRAL Legislative Guide and aligned with SA insolvency legislation.

In June 2006 draft new business rescue legislation was distributed for comment to selected parties.

This latest version by new authors is reportedly a debtor-friendly "mix of judicial management, Chapter 11 and other".

Questions have been raised about its compatibility with SA insolvency legislation and Uncitral guidelines.

Nevertheless, the main features are understood to be:

Debtor-friendly (similar to Chapter 11) with regard to:
- Who appoints the supervisor in charge of business rescue.
- The board and directors continue to perform and exercise their functions and powers.
- Committee of employees, or of creditors may consult with the supervisor in charge of business rescue about any matter relating to the business rescue proceedings, but may not direct or instruct the supervisor.
Requiring a majority vote of both shareholders and independent creditors.
A moratorium on the rights of claimants and legal proceedings against the company.
Post-commencement finance ranking highest.
No time limit on the duration of business rescue as long as it is working.
Opening the door for pre-packaged business rescue.

Proposed new business rescue legislation will be published and analysed here as soon as it has been officially released. For initial comments on new business rescue legislation, read Werksmans' "Turnaround".

Is debtor-friendly business rescue legislation flawed?

The switch from previous creditor-friendly approaches to a debtor-friendly business rescue approach represents a significant reversal with more positive implications for distressed companies at the expense of creditors.

Gary Moore, an attorney practising in the commercial department of a large Johannesburg law firm, warns against slavishly following the debtor-friendly approach of Chapter 11 in the USA, in an 16 May 2006 article in the Free Market Foundation.

The government is seriously considering a revision of company-insolvency law that will take account of the USA’s Chapter 11 procedure and allow a company to seek protection from its creditors, avoid paying all its debts, and resume business. This could introduce a flawed system, with perverse effects of coddling sick companies, encouraging inefficient managers to avoid restructuring, allowing unproductive firms to undermine their healthy competitors, thereby promoting unfair competition, and weakening entire sectors.

The trade-and-industry department (DTI) has issued a policy document which deals with the reform of company law (South African Company Law for the 21st Century: Guidelines for Corporate Law Reform), which says that the department has decided to revise company law to bring it into line with international trends and to accommodate the changing business environment. The paper sets out the approach that the government intends taking.

On the one hand, the document recognises that corporate businesses are central to the country’s prosperity. The document says that a key role for government is to ensure that its regulatory framework promotes growth, employment, stability, good governance, confidence and competitiveness. Regulation should not create unnecessary artificial preferences and distortions. Company law should promote investment in markets and companies, and the efficiency of companies and managers. Over a century ago, case law ruled that directors must act in the long term interests of the shareholders: Shareholders invested their capital in the company so are entitled to its profits after claims are satisfied; as residual claimants are best positioned to police the efficiency of the company.

But on the other hand, the policy document also says that regulatory policy should promote equity, in light of the government’s view that there is a second, marginalised, economy, populated by those unemployed in the formal economy, which risks falling further behind if there is no decisive government intervention. There will be a review of company law that will have regard to the interests, not only of shareholders, but also of creditors, employees and other participants and interests such as the state, consumers and suppliers, and incorporating the view that there is a growing need for more social responsiveness by enterprises.

Since at least the 1932 US law-professor’s article about whom corporate managers are trustees for, says the document, the approach of running companies mainly to benefit its shareholders has been questioned. In the late 1980s when the debate about corporate governance commenced, concerns about other stakeholders revived, and there is now much opinion that corporate governance is about balancing economic with social goals, so that companies should be controlled to benefit shareholders, employees, suppliers, lenders, customers and society at large, and be run in partnership with them.

The document proposes that shareholders’ interests should be balanced with others’ because a company is a social institution whose economic pursuits should be constrained by social imperatives.

Regarding a company’s insolvency, the document says that the winding-up of companies concerns not only creditors, but a multiplicity of interests, including shareholders’ and employees’, as well as the public’s in their proper administration. The DTI envisages the introduction of a proposed new Insolvency and Business Rescue Bill, and notes that in practice the current system of judicial management is rarely used, even more rarely leads to a successful conclusion, and allows a protective moratorium only where there is a reasonable opportunity that, if the debtor company is placed under judicial management, it will be able to pay all its debts.

In contrast, new business-rescue systems have been introduced in the past decade in Canada, Australia and other countries which, say commentators, recognise a well-nigh-universal reality of creditors being prepared for their own benefit to forgive part of the debt, and that it is frequently the case that a creditor will benefit far more from having the debtor back in the market place than from suing it to extinction. Furthermore, the agreed plan by which the future relations between the debtor company and its creditors will be governed may well include the reduction of the company’s overall indebtedness. These commentators recommend that new rescue provisions should allow a specified majority of creditors to approve a plan under which the debtor may emerge from protection and resume normal commercial dealings. The DTI says that this recommendation and the USA’s Chapter 11 provisions will be taken into account in the law review process.

In carrying out the review, the government would be well advised to consider the extent to which the US Chapter 11 bankruptcy-protection measure is a flawed system. It has the perverse effects of coddling indebted companies, encouraging incumbent managers to avoid restructuring, indirectly allows bankrupt firms to undermine their healthy competitors, and in effect promotes unfair competition, thus depressing entire industries, as in the case of the US airline industry.?

Useful links for business rescue in South Africa

Business rescue as the 3rd stage in the timeline of financial distress, the objectives and benefits of business rescue, its cost, success rate and key success factors. It also contains a discussion of what impact new business rescue legislation may have on the timeline of financial distress, and key success factors for business rescue in South Africa.
Business rescue legislation for more information how business rescue legislative reforms will change business rescue in South Africa.
South African Company Law for the 21st Century: Guidelines for Corporate Law Reform.
Werksmans' "Turnaround" - a synopsis of draft new debtor-friendly business rescue legislation.
History of business rescue legislation reform in South Africa for more information on preceding initiatives.
Business rescue elsewhere in the world.

Internationally, a big rise in companies facing serious financial difficulties

noreply@blogger.com (Corporate Renewal Solutions) — Wed, 26 Jul 2006 08:53:00 +0000

"The Business" reported a big rise in companies facing serious financial difficulties July 16 2006

Opinion of Standard & Poor

More companies are hitting financial difficulties than at any time since 2003, according to data from ratings agency Standard & Poor’s (S&P).

The figures indicate that the global credit boom is coming to an end.

S&P’s Global Potential Fallen Angel survey, one of the key indicators of corporate financial health, reported on Friday that 25 companies gained a speculative rating in the month to July 11, putting $34bn (E26.9bn, £18.5bn) worth of debt at risk.

A speculative rating downgrades their debt to junk status.

This is the first time the companies falling to speculative grade has outnumbered those climbing to investment grade for two years.

The figures explains recent moves by Goldman Sachs and Ernst & Young, among other leading institutions, to bolster their teams specialising in restructuring companies.

The report comes the same week that the Bank of England’s Financial Stability Report gave a stark warning that London’s institutions were taking too much risk and were exposed to a financial downturn.

The Bank warned: “In the event of a sharp fall in asset prices, some of the underlying vulnerabilities in the balance sheets of corporates, households and, ultimately, financial institutions could be exposed.”

The low interest rates of the past two years have left markets awash with credit, protecting failing companies and fuelling a wave of corporate takeovers.

Opinion of Edward Altman (Z-Score inventor)

Edward Altman, a finance professor at New York University who specialises in predicting defaults, told The Business: “The structure of credit markets has changed and non-traditional lenders such as hedge funds and private equity have kept the default rate down. Will it continue? I believe things will change, and change soon.”

Opinion of TMA

Last month, a poll of corporate restructuring experts by the US Turnaround Management Association revealed that 90% of the industry expected “a rude awakening” for credit markets by the end of next year.

The association’s president Colin Cross said: “The combination of high-leverage multiples with an expected increase in default rates indicates the credit markets are in for a major correction by the end of 2007.”

Opinion of a London Bank

In Europe the cycle also appears to be turning.

The head of distressed debt investment at a large London bank said business was starting to pick up next year after a lean 2004 and 2005.

He told The Business: “Up until May this year there hadn’t been a European default for 15 months. There were two European defaults in June and could potentially be three in July.”

He had identified at least 20 companies in Europe moving towards distressed scenarios, mainly auto-suppliers, DIY groups, and four companies who had issued “payment in kind” debt last year.

But he did not expect the coming correction to be as severe as in 2001 and 2002, when the collapse of companies like WorldCom, Enron and Marconi created a E300bn market for distressed debt.

At best, the downturn would create a E120bn market by 2007-2008.

The number dropping to speculative grade, or “fallen angels”, peaked in 2002, says S&P, when there were 146.

In 2004 there were 14, close to the record 1996 low of 11. In 2005, there were 41 and there have already been 25 this year.

Note: The indications of a global credit boom coming to an end is in line with what is observed in South Africa (see the post South African turnaround industry market watch below).

Corporate renewal, turnaround and business rescue discussion forums

noreply@blogger.com (Corporate Renewal Solutions) — Thu, 20 Jul 2006 02:24:00 +0000

All those interested in corporate renewal, turnaround and business rescue now have the opportunity to view their opinions and enter into debate in public and closed forums.

There are four sets of discussion forums at Turnaround industry in South Africa forums:

General corporate renewal, turnaround and business rescue topics.
A discussion forum on TMA-SA open to the general public.
Closed discussion forums for registered TMA-SA members only. These deal with all the executive functions of TMA-SA and provides the opportunity for members comment on and ask questions about the strategy, management and operations of TMA-SA. There is also a forum where Exco asks members for opinions and advice.
Closed discussion forums for TMA-SA management only.

South African turnaround industry market watch - June 2006

noreply@blogger.com (Corporate Renewal Solutions) — Fri, 30 Jun 2006 19:42:00 +0000

Turnaround in the private sector

The South African private sector turnaround market has been very quiet in 2006, but there are signs of increased activity.

Robust economy

South Africa has been experiencing unprecedented growth, with interest rates the lowest in 24 years. While the robust economy is good for the country, it leaves little work for turnaround practitioners and turnaround professionals of other disciplines compared to the busy days of the 1990's.

Low liquidation activity

The low turnaround activity is reflected by compulsory company liquidations being at a low point - 20% of what it used to be during the 90s as illustrated by the graph below.

Interest in turnaround education waning

The annual turnaround management conference at Wits Business School seems to draw less delegates each year. What is encouraging though, is the increased number of government and black delegates at the May 2006 conference.

Turnaround market to pick up

Turnaround industry participants, however, expect that the market will pick up in 2007.

BEE transactions

A number of past BEE transactions have run into trouble, and pressure from financiers may lead to turnaround advisory work or intervention.

Slowdown

With consumer debt at a high point, there are signs that some industries such as the retail industry are starting to slow down.

Rising interest rates

In June 2006, the prime rate increased by 0,5% after reaching its lowest point in 24 years. The SA Reserve Bank's monetary policy committee may hike rates by at least another 50 basis points at their next meeting on August 2-3. Forward rate agreements are discounting another 150 basis point increase in rates by the end of the year.

Weakening Rand

With the account deficit coming in at 6.4% of GDP, the exchange rate weakened to a 2½-year low of R7.5275/$ in June 2005. Although it has recovered somewhat, it spells trouble for importers.

Rising inflation

Higher factory gate prices will have a knock-on effect on inflation. The monetary authorities feel thatthe inflation target could break the upper end of its designated range, rising to 6.2% in the first quarter 2007.

New business rescue legislation

In the medium term, South Africa will see new business rescue legislation incorporated in the new companies act.

This will provide the turnaround industry with a substantial boost as it has in overseas countries where modern business rescue legislation has been introduced.

Turnaround in the public sector

In contrast to the private sector, turnaround in the public sector is buoyant.

Turnaround and transformation programmes are driven by government striving for increased service delivery and increased financial performance.

Parastatals undergoing turnaround action are Transnet (Maria Ramos), South African Airways (Khaya Ngqula) and Denel (Shaun Liebenberg). The turnaround at the South African Post Office by Maanda Manyetse, who has since left for MTN, seems to have run its course, and very successfully so. Turnaround and transformation programmes are being run at the South African Revenue Services (Pravin Govender) and Department of Home Affairs. Initiatives are under way at local government level to place municipalities on a sound financial footing and improve their service delivery.

The public sector prefer the international management consultancies or local BEE consultancies to help improve results. With the exception of some parastatals, the approach is more that of business transformation rather than conventional turnaround. Accordingly, there is little demand for the services of the established turnaround practitioners from the private sector.

Government itself facilitates labour consultation based turnarounds through the NPI by subsidising the fees of private sector consultants who bring in projects and follow the NPI's turnaround and labour consultation methodology. There is a distinct bias towards BEE consultants. It was encouraging to note employees of NPI attending the Wits Business School turnaround management conference.

The dti's SEDA is also looking at formally supporting turnaround.

The Turnaround Management Association - Southern Africa is intent on engaging with government bodies such as NPI and dti to promote closer cooperation between government and the private sector.

Workshop: debt restructuring

noreply@blogger.com (Corporate Renewal Solutions) — Thu, 11 May 2006 18:40:00 +0000

Date: 31st August – 1st September, 2006

Venue: Irene Country Lodge, Irene.

Topic: Debt restructuring.

A pc-based event that will be using case studies (real South African & International examples) as the core of the course. It will be covering the entire restructuring process from problem identification through to designing, developing and selling the restructuring proposal.

Speaker: Julian Roche.

Cost: R8 495 per delegate.

Invitation: (549k)

Benefits of attending the course:

Know how to spot companies in distress or heading into distress.
Understand why company restructurings are necessary.
Appreciate the role of debt and equity instruments in corporate restructuring.
Learn how to evaluate shareholder value in failing and debt-ridden companies.
Gain knowledge of how banks approach corporate restructuring.
Learn how to design turnaround strategies.

This turnaround news flash was brought to by Turnaround Solutions - turnaround management consulting firm rescuing distressed companies and improving results of underperforming companies in South Africa.

Conference: Managing business transformation

noreply@blogger.com (Corporate Renewal Solutions) — Sun, 30 Apr 2006 19:06:00 +0000

A 2-day conference on managing business transformation will be held 17 - 18 May at the Balalaika Protea Hotel in Sandton.

Follow this link to download the managing business transformation conference programme.

Issues such as low business transformation activity in the private sector; low consulting rates paid by the public sector; BEE transformation labeled as business transformation; difficulties with achieving effective business transformation in the public sector; corporate governance, are to be confronted at Managing Business Transformation conference.

This two-day conference (17-18 May 2006, Balalaika Protea Hotel, Sandton) is designed to address a variety of current topics and encourage direct interaction and case studies from organisations that have gone through transformation and those going through the process. This intensive conference will provide highly practical and relevant information on the latest developments in Business Transformation from practitioners, government, trade unions and consultants.

"Business Transformation focuses the attention on an integrated company-wide roadmap for an improved future. In doing so, it ensures alignment and internal consistency by reshaping the strategy, organisation and operations of businesses as a whole," noted Jan van der Walt, Corporate Renewal Solutions CEO.

But Business Transformation does not only provide the answers to what to change in response to market-place events. More importantly, it also provides the answers on how to manage such change through its focus on transformational change management to align and commit leadership, to involve and mobilise employees, and to obtain stakeholder support.

Business Transformation should be both an essential and a continuous management competency of any enterprise. It is about implementing the enterprise's business strategy and moving closer to its vision.

Change Agents are responsible for a variety of strategic and transformation duties necessary to run an organization efficiently. They serve as information and communication managers for an organisation; gather competition intelligence and respond to environmental changes.

"A comprehensive change management programme is required so that employees (including all levels of management) can understand the business case for the transformation and can therefore buy-in into it," responds Nomzamo Ntuli, Rand Water's Corporate Planner.

Contact: Goodman Chauke on Tel: 011 784 0888

Conference: Managing a turnaround

noreply@blogger.com (Corporate Renewal Solutions) — Sat, 29 Apr 2006 19:16:00 +0000

A 5-day conference on turnaround management will be held 15 - 19 May at Wits Business School.

Follow this link to download the Turnaround management course brochure and application form.

Turnaround strategies and techniques are essential for any organisation in distress or any business. A solid business plan can assist an entrepreneur in making a success of a company even after several failures or an organisation that is struggling.

“Businesses and entrepreneurs should not see bankruptcy or liquidation as the end of the road; rather they should be motivated to persevere by implementing an effective turnaround strategy in order for the business to survive,” says one of the programme leaders, Frans van Heerden: Wits Business School.

The “Managing a Turnaround” programme is designed to provide participants with an analytical framework, help develop a mindset to appreciate and tackle turnarounds and share experiences with turnaround leaders such as the CEO of Barloworld, Tony Phillips, who will be presenting his case study at the course.

The programme provides insight into the various stages and processes of turnaround management such as the definition, stages of a turnaround, rapid appraisal and detailed analysis, recovery plan development and implementations. The financial, legal, operations, marketing, politics and human considerations are evaluated in depth.

CEO’s and managers who are likely to be confronted with turnaround situations or are involved in mentoring individuals on turnaround techniques are encouraged to participate in this programme.

The key learning outcomes of the programme include:

Differentiating how turnaround differs from “normal agreement”.
Provide students with a detailed analysis and recovery development plan.
Present case studies from the private sector, parastatals and government providing participants with a broader understanding of how turnaround strategies could be implemented in various sectors.

For more information on the course please contact programme manager: Debbie Sachs on tel: (011) 717-3637, e-mail: sachs.d@wbs.ac.za. Alternatively contact Frans van den Heeden on cell: 082-557-5130 or e-mail: fmvh@mweb.co.za.

Introducing Turnaround industry in South Africa

noreply@blogger.com (Corporate Renewal Solutions) — Mon, 20 Mar 2006 01:55:00 +0000

The turnaround industry in South Africa is a professional community of turnaround and corporate renewal professionals who share a common interest in strengthening the economy through the restoration of corporate value.

Turnaround industry in South Africa is hosted on the web site of Turnaround Solutions, a distressed and underperforming company turnaround management firm in South Africa.

As indicated by its name, it deals with the turnaround and business rescue industries in South Africa.

It covers turnaround-related news, events, opinions, links, publications and associations.

The section on turnaround industry structure provides information about the firms and professionals participating in the turnaround industry, as well as turnaround industry driving forces and constraints.

For the more technically minded, there is a section on the timeline of financial distress, which explains how turnaround takes place under conditions of shareholder-led correction, informal creditor workout, and insolvency.

With South Africa getting new business rescue legislation as part of the new companies act, there is a section on business rescue itself, as well as aspects of the new legislation.

This blog extracts items from the web site. The opinions expressed here and on the web site are those of Turnaround Solutions.