Edcon began selling the company’s three remaining brands (Edgars, Jet and Thank u) after being placed on business rescue on April 29 due to the Covid-19 outbreak.
Edcon CEO Grant Pattison said the group had to make a decision after it ran into a financial crunch due to the outbreak of the new coronavirus: liquidate or apply for business rescue.
“In these circumstances, South African legislation requires that the company be either liquidated or placed in business rescue. To give us a longer period to collect the money, the council decided to apply for business rescue instead. ”
As a result, Piers Marsden and Lance Schapiro were appointed as business rescue practitioners on April 4. It was found that a total of R3.7 billion is owed to more than 80 entities after Edcon’s list of creditors was published Monday as part of the business rescue plan.
A total of R888 million is owed to the Unemployment Insurance Fund, represented by the Public Investment Corporation (PIC), the group’s largest creditor. The UIF invested R1.2 billion in the group as part of a R2.7 billion recapitalization in March 2019.
Four of the country’s five largest commercial banks also have claims of R976m against Edcon. Three international investment banks claim R358m.
The business rescue practitioners have announced that they will be exploring an accelerated sales process for parts of Edcon after no buyers or investors for the group could be found in its entirety. It also aims to keep the business going during the summer season.