December is typically the time of the year that Business Rescue Practitioners take stock of what went on during the year. They meet with clients, ask important questions, and look for ways to add value in an environment that is facing massive disruption.
Over the past two years, there have been moments when the value of the Business Rescue process has been openly challenged, with many in the public questioning whether the profession truly serves a purpose. Encouragingly, a recent update from Cliffe Dekker Hofmeyr (CDH) highlights the resilience and evolution of the profession during these trying times.
Continued Results for South African Business Rescue
In the world of South African Business Rescue and insolvency news, it’s promising to see that the Business Rescue mechanism is continuing to deliver positive outcomes. Multiple companies currently undergoing Corporate Business Rescue are reporting significant progress on their paths back to solvency.
CDH notes that the Ster-Kinekor Group has reached a stable operating condition and anticipates continued growth. This is largely due to successful engagements with key stakeholders, promising negotiations with investors, and a strong film slate that is driving audience numbers up.
Similarly, Comair’s Business Rescue Practitioners have confirmed that the airline’s funding challenges have stabilised. The company appears to be rescue-capable, with a legal matter in the U.S. being the only remaining hurdle related to a cancelled aircraft purchase agreement.
Kulula.com, Comair’s subsidiary, has also seen a surge in demand on its Cape Town to Durban route, enabling it to expand to a double daily service—an improvement from pre-pandemic schedules.
A Slippery Slope for SOEs
CDH highlights that Transnet reported a R8.8 billion loss for the year ending March 2021, a sharp R11.1 billion reversal from its previous year’s profit. Management has attributed this decline to reduced volumes and revenue linked to the COVID-19 pandemic and associated lockdowns.
Transnet now finds itself among several state-owned enterprises (SOEs) weighing their legal recovery options to ward off mounting creditor pressure. This includes evaluating Business Rescue in South Africa as a viable alternative to liquidation.
The state of SOEs has sparked further debate, with the National Metalworkers Union of SA (NUMSA) petitioning the Constitutional Court to have Parliament rule on whether SOEs should be permitted to go into liquidation. Although the application was dismissed, it reflects a growing awareness of the tools available for economic recovery—chief among them, Business Rescue Services.
Adding Value Beyond Business Rescue
One important trend emerging in the profession is the rise of informal restructuring. While Business Rescue is a formal and often intensive intervention, many companies are now recognising early warning signs of financial distress and seeking proactive support.
These businesses are increasingly engaging with Business Rescue Companies and Business Rescue Practitioners for strategic advice, financial health checks, and turnaround guidance—before it’s too late.
Agility has become a buzzword. Companies that are financially distressed must learn to pivot quickly, adapting their models to capture new market opportunities. Business Rescue Practitioners must do the same by evolving their offerings beyond crisis management and into ongoing business advisory services.
This signals a shift in how Business Rescue Services are perceived—not just as emergency interventions, but as part of a long-term, sustainable support framework for South African businesses.
Final Thoughts
The future of Business Rescue in South Africa looks increasingly collaborative. With more companies seeking out early-stage interventions and customised strategies, the profession is well-positioned to lead economic recovery efforts—provided it adapts to the shifting needs of the market.
As Business Rescue Practitioners, the challenge is clear: continue delivering results, stay agile, and find new ways to add lasting value for businesses across the country.
Frequently Asked Question
Business Rescue
Business rescue is a legal process designed to rehabilitate financially distressed companies, allowing them to continue operating while restructuring their debt and obligations. The primary goal is to save the company from liquidation and ensure long-term sustainability. By understanding business rescue and its objectives, businesses can make informed decisions when facing financial challenges.
Read this article “What Is Business Rescue and How It Helps Companies Overcome Financial Challenges“ for a more comprehensive overview of Business Rescue.
Business rescue and liquidation are both options for financially distressed companies, but they have very different outcomes. Business rescue aims to rehabilitate the company, allowing it to continue operating, whereas liquidation involves winding down the business and selling off assets to pay creditors. Choosing between business rescue vs liquidation depends on the company’s specific circumstances and long-term goals.
A business rescue practitioner is a licensed professional responsible for overseeing the business rescue process. Their role includes developing and implementing a rescue plan, negotiating with creditors, and ensuring that the company adheres to legal requirements. The business rescue practitioner is crucial to the success of the process, guiding the company toward financial stability and avoiding liquidation.
Business rescue proceedings involve several key steps: the appointment of a business rescue practitioner, the development of a rescue plan, and the approval of this plan by creditors. Throughout the process, the company’s operations are closely monitored to ensure compliance with the rescue plan. These steps are designed to maximise the chances of returning the company to profitability.
A company should consider business rescue when it is financially distressed and likely to become insolvent within the next six months. Indicators include poor cash flow, mounting debt, inability to pay creditors, and legal threats from suppliers or financiers.
Read this article “What Is Business Rescue and How It Helps Companies Overcome Financial Challenges“ for a more comprehensive overview of Business Rescue.
A temporary moratorium is placed on legal proceedings against the company, preventing creditors from initiating claims or enforcing payments while the rescue process is underway.
Read this article “What Is Business Rescue and How It Helps Companies Overcome Financial Challenges“ for a more comprehensive overview of Business Rescue.
Any registered company in South Africa facing financial distress can apply, regardless of size or industry. The process is especially relevant for SMEs, hospitality, retail, manufacturing, and transport sectors post-COVID.
Read this article “What Is Business Rescue and How It Helps Companies Overcome Financial Challenges“ for a more comprehensive overview of Business Rescue.
Any registered company in South Africa facing financial distress can apply, regardless of size or industry. The process is especially relevant for SMEs, hospitality, retail, manufacturing, and transport sectors post-COVID.
Read this article “Business Rescue vs. Liquidation: What’s the Difference?” to gain a better understanding of the Business Rescue Process.
Employees generally keep their jobs during business rescue. Wages are still paid, although restructuring may lead to revised roles or temporary pay cuts. The process aims to minimise retrenchments.
Read this article “Business Rescue vs. Liquidation: What’s the Difference?” to gain a better understanding of the Business Rescue Process.
Business rescue is designed to be completed in around three months, but it can be extended depending on the complexity of the situation and creditor negotiations.
Read this article “Business Rescue vs. Liquidation: What’s the Difference?” to gain a better understanding of the Business Rescue Process.
