Business rescue practitioners (BRPs) of Edcon, who are the owners of retail stores including Jet and Edgars, are on course to earn R4500 an hour, the BRPs revealed in their business rescue plan.
“In terms of section 143 of the Companies Act, the BRPs have proposed an agreement with the Company providing for further remuneration in the form of an increase in the hourly tariff to market-related hourly rates of R4 500.00 per hour, effective from the Commencement Date until the Substantial Implementation Date, which agreement is subject to the adoption of this Business Rescue Plan,” reads the business rescue plan in part.
The BRPs Piers Marsden and Lance Schapiro were brought on board in April when Edcon directors put the company under business rescue following years of underperformance and a pile of debt.
Edcon was a successful retailer until US-based private equity firm Bain Capital got its hands on it in 2007, delisting Edcon from the JSE in a debt-financed R25 billion buyout.
Bain gave ownership of Edcon to creditors in 2016 in a debt-for-equity swap that reduced Edcon’s debt burden to R6 billion from R26.7 billion.
The BRPs in a statement said a “significant” number of investors have expressed interest in the sales process and will move to the “due diligence” phase.
“It is clear that it is in the best interests of all stakeholders to proceed with this business rescue plan, which fundamentally seeks to obtain the sale of the Business and, or its Divisions, importantly contributing to job preservation and business continuity,” said the BRPs.
“Creditors and landlords will also be in a better position as they will not only receive better dividends but the sale will also provide them with sustainable customers to ensure continued trading.”
The BRPs further warned that the implementation of the sales process may lead to positions being declared redundant across various job categories which may lead to retrenchments.
