SG Turnaround ( Salvis Gratia) - Johannesburg, South Africa

Business Rescue is a legal process in South Africa designed to rehabilitate financially distressed companies. It aims to maximize the chances of the company continuing on a solvent basis or, if not possible, to achieve a better return for creditors than immediate liquidation.

Key Components:
Appointment of a Business Rescue Practitioner (BRP):

A licensed professional takes over management to develop and implement a rescue plan.
Moratorium on Legal Proceedings:

Legal actions against the company are paused, allowing reorganization without immediate creditor claims or liquidation threats.
Development of a Business Rescue Plan:

The BRP prepares a plan detailing strategies for debt restructuring, operational changes, and management adjustments to return the company to profitability. The plan must be approved by creditors and stakeholders.
Stakeholder Involvement:

Creditors, employees, and other stakeholders are involved, ensuring transparency and cooperation.
Implementation of the Rescue Plan:

The BRP oversees the plan's implementation, which may involve operational restructuring, renegotiating debt terms, raising funds, or selling non-core assets.
Outcome:

The primary goal is to restore the company to solvency. If not achievable, the process seeks to provide a better return for creditors than liquidation.
Benefits:
Continuity of Business Operations: Allows the company to keep trading while restructuring, preserving jobs and business relationships.
Debt Restructuring: Offers a chance to renegotiate debt terms, making financial obligations more manageable.
Improved Creditor Returns: Aims for a better outcome for creditors than immediate liquidation.
Management Support: The BRP brings expertise to navigate financial difficulties and implement recovery strategies.
Conclusion:
Business rescue is a vital mechanism in South African corporate law, aiming to preserve businesses, protect jobs, and enhance creditor returns.

Informal Turnarounds are non-statutory methods to resolve financial distress in companies without legal formalities. These approaches focus on voluntary agreements and internal measures to restore profitability and solvency.

Key Components:
Management Review:

Assess and strengthen the leadership team.
Financial Restructuring:

Negotiate with creditors to restructure debt and alleviate financial pressure.
Operational Changes:

Implement cost-cutting measures and improve efficiency.
Revenue Enhancement:

Develop strategies to increase sales and diversify revenue streams.
Stakeholder Communication:

Maintain open communication with employees, creditors, suppliers, and customers.
Cash Flow Management:

Monitor and manage cash flow to meet short-term obligations.
Benefits:
Flexibility: Tailored solutions without legal constraints.
Speed: Quick implementation, minimizing business disruption.
Cost-Effective: Less expensive than formal processes.
Stakeholder Cooperation: Encourages support and collaboration.
Conclusion:
Informal turnarounds offer a strategic option for companies to navigate financial distress through voluntary, internal measures, focusing on leadership, debt restructuring, and operational improvements.