Edcon bondholders trapped?
Edcon may continue to hobble along even without a cash injection from the PIC
Word is the Public Investment Corp (PIC) is not inclined to hand over about R2bn to Edcon to save it from a fate we’ve all long thought unavoidable. Of course, right now the PIC is so fixated on its own survival it’s probably not in the mood to consider the survival of other chronically poorly managed entities, even those in the private sector. It’s been almost 12 years since private equity firm Bain thought it would be a brilliant idea to spend R25bn taking one of the country’s most successful clothing retailers private, load it up with tax-deductible debt and pocket lots of profit. At that stage Edcon had about 50% of the clothing and footwear market and, under the stellar leadership of Steve Ross, looked as though it could pick up even more. It is now below 30% and dropping. Still, at 30% it is nearly twice that of its nearest competitor, and large enough for "too big to fail" pleas for support. At stake are over 20,000 jobs and 1,350 stores. Some analysts see Edcon as a retail v...
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