THE Ellerine furniture arm of failed lender African Bank Investments (Abil) has received a potential R400-million offer for its sub-Saharan business‚ its administrator said yesterday as the company was wound down to repay creditors.
Also yesterday, Ellerine’s creditors voted for a business rescue plan over immediate liquidation‚ giving administrators more time to sell off assets.
The furniture retailer was forced into business rescue in August after parent company Abil cut off funding. Days later, Abil was rescued by the central bank.
The administrators of Ellerine had received the R400- million indicative offer from a listed South African company for its business outside South Africa‚ Leslie Matuson‚ leading the rescue plan‚ said.
“That business is viable‚” he said. Its Africa business has nearly 80 stores across Namibia‚ Botswana‚ Zambia‚ Lesotho and Swaziland. “That R400-million is what we anticipate realising; is the amount of the indicative offer for the rest of Africa.”
Under restructuring‚ unsecured creditors will receive as much as 30c for every rand owed. Liquidation would have left them with up to 13c on the rand‚ according to the administrators’ estimates.
Ellerine is in advanced talks to sell two of its brands to other furniture retailers.
It is also in talks with other retailers who may assume the leases of some existing Ellerine outlets‚ a move that could save some of the roughly 6000 jobs at stake‚ Matuson said.
The company owes its creditors‚ including South Africa’s big banks‚ almost R1.3-billion‚ reflecting the extent to which Abil’s failure rippled across corporate South Africa.
Abil bought Ellerine in 2008 in an ultimately disastrous attempt to sell furniture on credit. – Reuters