RESTRUCTURING
Edcon gets buy-in for new company
Creditors vote to adopt compromise proposals for the restructuring of SA’s largest clothing retailer
It was a busy end to 2016 for Edcon as the retailer cleared what CEO Bernie Brookes called "the last hurdle" in a deal that will see the group come under its creditors’ ownership. In mid-December, SA’s largest clothing retailer launched a compromise sanction process for the proposed restructuring of the group. The process involved going to senior lenders and asking them to accept a shareholding in the company that will be formed following the restructure in exchange for a reduction in the debt owed to them. Days before New Year, 95.45% of Edcon’s senior secured creditors and 84.18% of super senior third-ranking creditors voted to adopt compromise proposals. Once the restructuring process is complete, Edcon’s debt will fall from R29bn to R7bn. Brookes said he was pleased that the group would soon be able to move forward, having substantially reduced its debt. "In tandem with the restructuring, we continue to advance all of our other change initiatives at a rapid rate."
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