The bankruptcy and restructuring group of pan-African corporate law firm, Bowman Gilfillan said today, 7 March 2014,that the moyo Group of companies, which own and operate a well-known chain of African-themed restaurants in South Africa, had achieved a successful business rescue.
This week business rescue plans were approved in eight of the companies in the Group, completing a successful sale of these companies to the Fournews Consortium which consists of Fournews, an experienced operator of various local food and beverage brands including News Café, Café Fino, Smooch and others and a well-known South African private equity firm.
“The successful rescue of the Group means that over 400 employees will keep their jobs and five restaurants based in Cape Town, Johannesburg and Durban will keep trading,” comments James McKinnell, Bowman Gilfillan Director.
“The rescue also means continued trading for hundreds of suppliers to the Group, and that a well-known South African brand will be preserved and strengthened.”
He added that several hundred pre-business rescue creditors would benefit from the payment of a modest dividend.
Bowman Gilfillan advised the moyo Group in September last year not to proceed to liquidation but to be placed under business rescue under Chapter 6 of the new SA Companies Act, which has been in force for some three years.
Since then a team of attorneys and support staff have assisted the appointed business rescue practitioners with all aspects of the process, which was complex given the Group’s size and geographical spread, its legal and financial structure and the diverse interests of its stakeholders.
A wide range of relatively novel legal issues also arose because, although the companies all operate in a practical and commercial sense as one entity, there are no group rescue provisions in Chapter 6 and each company in business rescue follows its own rescue process.
“We are particularly pleased to have assisted in the preservation of employment of hundreds of people, and trade for suppliers. Chapter 6 is intended to achieve this very outcome by providing the necessary protection and time to deliver a positive result,” said McKinnell.