Johannesburg – According to a letter sent by CEO Grant Pattison, retailer Edcon, who owns Edgars and Jet, is set to start with voluntary business rescue proceedings.
In the letter, dated April 29, Pattison writes that about R2billion in lost sale due to the nationwide lockdown caused by the coronavirus pandemic had consumed the group’s remaining cash.
The R2.7 billion in cash that was provided to the retailer during its last restructuring had been “substantially utilised” to fund the losses for the financial years ended March 2019 and 2020.
Edcon says it will open its stores on May 1 in line with the government’s “level 4” regulations but will have to do so under business rescue.
“This decision was made in the best interest of our company and all our stakeholders. In the short time that has been available to us, we have been unable to raise the funds needed to pay the creditors for the March and April month-ends.”
“In this circumstance, South African law requires that the company either be placed in liquidation or business rescue. To provide us with a longer period to raise the money, the board has taken a decision to file for business rescue.”