June 9 (Reuters) – Administrators in charge of South Africa’s Edcon have proposed a sales process that may lead to job redundancies in “significant numbers”, after the retailer filed for a form of bankruptcy protection in April.
Administrators are seeking the sales of the retailer’s divisions as going concerns, according to details of the business rescue plan published late on Monday.
“This may, in turn, result in the dismissals of some or all of the employees, for operational reasons subject to outcome and implementation of the sales process,” the administrators were quoted as saying in the document.
Edcon, which owns department store chain Edgars and budget clothing retailer Jet, entered “business rescue” proceedings after losing an estimated 2 billion rand ($120 million) of sales since the coronavirus pandemic reached South Africa in March.
The administrators, Piers Marsden and Lance Schapiro of Matuson Associates, said the proposed plan will lead to an “efficient rescue of the company” and will balance “the rights and interests of all stakeholders”.
A meeting of creditors and other holders with a voting interest will be held on June 22.
The development comes weeks after administrators said there was a reasonable chance of saving the retailer.
Edcon, hurt also due to a drop in payments from customers who had bought on credit, was unable to pay suppliers and creditors in March and April. ($1 = 16.6582 rand)
(Reporting by Kanishka Singh and Shubham Kalia in Bengaluru; Editing by Kim Coghill and Himani Sarkar)
This article was first published on Reuters https://af.reuters.com/article/southAfricaNews/idAFL8N2DL68D and is republished with its permission.
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