Business rescue may be used to restructure South African state-owned companies

Lerothodi Mohale, Senior Associate, CDH, South Africa
Sibonile Moyo, Head: Legal Investments (SA) , Development Bank of Southern Africa, South 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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South Africa Corporate Governance Banking & Finance February 2022 Vol.15, No. 58, Winter 2022

Lerothodi Mohale

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The first author is Sibonile Moyo, head of legal for investments at the Development Bank of Southern Africa. She has over seven years of experience as a practicing attorney focusing on finance and projects. The second author is Lerothodi Mohale, senior associate at Cliffe Dekker Hofmeyr. He specializes in insolvency, restructuring and business rescue.

Sibonile Moyo

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Sibonile is an experienced transaction advisor with over 10 years deal experience specialising in deal assessment and structuring, project finance, climate finance, renewable energy, legal and institutional due diligences, business development, contract regulatory and risk analysis, drafting and review of finance and project documents, equity instruments, institutional review and public finance. She has acted as lead advisor on a range of project development, corporate and finance transactions, public private partnership issues, concession or public private partnership agreements, construction and operational contracts, power purchase agreements, public procurement, regulatory and administrative review and loan agreements, with a focus on energy, social infrastructure, ICT, water infrastructure, transport & logistics as well as municipal finance. She also acted as lead advisor on a range of general corporate and commercial work and company secretarial work. Her responsibilities include, due diligence, assisting with the negotiating, drafting, preparing and reviewing of mandate letters, term sheets, concession or private public partnership agreements, construction and operational contracts, loan facility agreements, security agreements, various commercial agreements and related documents, assisting with various matters for financial closes, researching diverse aspects of law and drafting advisory opinions.

Development Bank of Southern Africa

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The DBSA is a government-owned development finance institution, established in 1983, with the mandate to promote economic growth as well as regional integration for sustainable development projects and programmes in South Africa, SADC and the wider Sub Saharan Africa.

CDH

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Development Bank of Southern Africa is a financial development institution that funds development projects in Southern Africa. Cliffe Dekker Hofmeyr is a South African law firm specializing in various areas of the law, including corporate, banking and finance and restructuring.

South Africa Corporate Governance Banking & Finance February 2022 Vol.15, No. 58, Winter 2022