Fresh capital: know your rights
Strong balance sheets and solid shareholder bases have helped some companies cope with Covid-19, writes Shawn Stockigt
The SA economy was already fragile at the beginning of 2020, with persistently weak growth, low business and consumer confidence, and load-shedding.Covid-19 transformed these conditions into a perfect storm, and many domestically orientated companies, particularly in leisure and entertainment, were caught in it.The strength of SA management teams has been tested, with severe lockdown restrictions significantly intensifying the challenges of operating in a struggling economy.Companies had to act quickly. The first levers pulled were the cutting of costs and forgoing or postponement of dividends. The priority was to build a liquidity buffer. Some companies were already taking decisive action to strengthen their balance sheets, given their concerns that the SA economy would stay weaker for longer. Those companies that entered the crisis with conservative gearing are generally managing to weather it well.Other companies with weaker balance sheets were fortunate enough to have a solid sh...
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