Sold as a going concern

Sandra Beswick and Associates was able to assist Rosside Press (Pty) Ltd to achieve a last minute business rescue that resulted in the company being taken over by Bidvest as a going concern and 50% of the employees retaining their jobs.

TYPE

Family owned in existence for 50 years

INDUSTRY & SECTOR

Printing

DATE OF COMMENCEMENT

20th February 2012

FILING

Resolution by directors and shareholders

PUBLIC INTEREST SCORE

113

REASONS FOR FINANCIAL DISTRESS

  • Turnover decreasing due to various factors, loss of clients, higher prices margin 62%,
  • No costing system and control of allocating jobs;
  • Overhead expenses too high – family members still drawing from business although retired and no longer working there
  • No CEO to take effective management control;
  • Infighting among family
  • Overstaffed by 40 employees.

BUSINESS RESCUE PLAN

SALIENT DETAILS

  • Blue chip client base – Coca Cola, Adcock
  • Fully equipped factory and skills base
  • Potential to improve turnover and profitability.
  • Ripe for acquisition at a discount.
  • Bidvest Paperplus acquired assets and liabilities

ANNUAL TURNOVER

R 25 million per annum

ASSETS

R 5.9 million

LIABILITIES

CURRENT – R 7.5 million

DATE APPROVED

26th March 2012 with 75% of creditors voting

OUTCOME

PERIOD

4 months

AFFECTED PARTIES

  • CREDITORS
    • 100% payout on conclusion of transaction
  • SHAREHOLDERS
    • Although they were not paid out their sureties and security of the building were not exercised. They could recoup some of the losses from the sale of the building.
  • EMPLOYEES
    • 37 received retrenchment packages
    • Other were transferred within the Bidvest Paperplus group.

FINAL OUTCOME

Filed for substantial implementation of the plan on 31st May 2012

PRACTITIONER ANALYSIS

The takeover by Bidvest was the only option available to save the business as it would have required an injection of capital which was not forthcoming from shareholders. The filing for business rescue was almost too late as the management were not acknowledging that the business was facing liquidation.

Sold as a going concern.