Business rescue may be used to restructure South African state-owned companies
Lerothodi Mohale, Senior Associate, CDH
Sibonile Moyo, Head: Legal Investments (SA) , Development Bank of Southern Africa
The year 2021 marked ten years since the introduction of a new restructuring and administration regime in South African law, known as "business rescue", by the Companies Act, 2008. Since 1 May 2011, when the business rescue provisions of the Companies Act became effective, many private companies have gone into business rescue. However, it was only until 2019 that an unprecedented 'Titanic-and-iceberg' moment hit South African state-owned companies – when they started going into, or facing the possibility of going into, business rescue. Such state-owned companies relied on funding institutions to lend and advance money to them to fund their restructure and return to solvency.
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