“African Bank Investments Limited indicated that the retail furniture business continues to trade at a loss which requires working capital funding from ABIL and African Bank,” African Bank said in a a statement.
“As a consequence of the financial performance of Ellerine Furnishers Proprietary Limited (EF) a decision has been taken that no further funding would be provided by ABIL or African Bank to EF or Ellerine Holdings Limited.”
[DATA ABL:African Bank Investments Limited] is a financial service provider in the unsecured credit and furniture and appliances retail industry in South Africa. Ellerine Furnitures, or Ellerines, is its furniture retail arm.
The business rescue announcement comes after the resignation of ABIL CEO Leon Kirkinis on Wednesday, which saw African Bank’s share price plummet to below one rand the next day, more than 81 per cent lower than its previous trading price before the announcement.
(WATCH VIDEO: Unpacking ABIL’s FY loss and CEO resignation)
In July, African bank’s share price soared upon announcement that it was looking to sell its Ellerines business as the entire group continued to make losses.