The 125-year-old stationery retailer CNA has been placed in business rescue, its management team confirmed on Tuesday.
Business rescue means that a company gets breathing space from debt and other repayments, while business rescue practitioners take full management control. They then decide whether the business can be restructured to survive. Failing that, they would aim to achieve a better return for the company’s creditors and shareholders than an immediate liquidation of the company would.
Fin24 previously reported that CNA is behind on payments to suppliers and landlords. The retailer has been hard-hit by the Covid-19 pandemic, which kept customers out of the country’s big malls, and its stores.
One of its suppliers is Jonathan Ball Publishers, and its CEO, Eugene Ashton, told Fin24 that he believes going into business rescue will be a positive development for CNA.
“It will at least give them a chance to try rectify things. It was always going to be difficult taking over the business during the Covid-19 pandemic,” Ashton said.
“Business rescue is a logical consequence, and I am sure suppliers will work with them [CNA] to try [to] see if they can take themselves out of this situation. This is the right course of action and probably the best one too, for suppliers. There is no point in liquidating the business now because there are no material assets.”
Tashya Giyapersad and Simi Maharaj have been appointed as CNA’s business rescue practitioners, a director of the retailer confirmed.
CNA’s former owner Edcon was placed in business rescue in April last year, with all of its assets eventually sold off. Edcon sold CNA to an investment group, Astoria, with Exclusive Books’ former CEO Benjamin Trisk also taking a 30% stake. Astoria sold its 70% stake back to management last month.
Trisk is currently at war with the CNA board. Directors accused Trisk of contacting business rescue practitioners without their consent and then announced that he had resigned in April – which Trisk disputed.