More financially distressed companies that have gone into business rescue since 2011 have been saved than have failed, according to figures from the Companies & Intellectual Property Commission (CIPC). This disproves the general perception that business rescue has had a low success rate since the practice was introduced in SA in May 2011 under the Companies Act. Of the 1,122 business rescue proceedings completed by the end of 2016, 48% were successful compared with 38% that failed. The remaining 14% of cases were terminated before they actually entered the process. Just over 1,100 companies are currently in the business rescue process, CIPC figures show. Neill Hobbs, a senior business rescue practitioner at Cape Town-based Hobbs Sinclair Chartered Accountants, says the fact that the turnaround process takes much longer than initially expected is probably a key reason why people mistakenly believe that business rescue hasn’t worked in SA. "Initially, the view was that the process sho...
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