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BL Premium reports that CNA, the 125-year-old stationer, has been saved on the brink of collapse, after more than 75% of its creditors approved its business-rescue plan.
Just more than 78% of those owed money — including retrenched staff, suppliers and landlords — voted to save the chain. Black Mountain Investment Management will pay just R2m for more than 60 stores in terms of the plan. The ailing retailer owes creditors including former staff R264m. They will not receive the money they are owed under the proposed plan, yet surprisingly voted on Tuesday to keep the business alive. In June, CNA was placed in business rescue, a process that allows practitioners to take control of the company to restructure it and attract new investors while staving off creditors. Stefan Steyn, a turnaround expert, took over when there were 80 stores and has been closing loss-making stores, shut down the head office, cut the management salaries more than 40% and hunted for buyers. Had the proposal not passed, CNA would have been liquidated and about 300 employees would have been left without work. In Steyn’s view, the proposal to save the business was passed because the new owners committed to making R18m available to buy stock and pay for products soon. It was a “social” vote to save jobs at stores that would remain open in a country with the world’s highest unemployment rate, he said.
- Read the full original of the report in the above regard by Katharine Child at BusinessLive (subscriber access only)
Get other news reports at the SA Labour News home page