Our Case Studies

The exploration arm of an international operator entered into a joint venture with their local partners in sub- Saharan Africa. Our Partners undertook an enhanced due diligence on the local companies, their directors and their overall business profiles. This work, whilst satisfying the Foreign Corrupt Practices Act and similar regulatory and compliance demands, provided assurance to institutional lenders and political risk insurers in advance of a major long-term capital project.

Following reports of product loss from a mine, ourPartners conducted a product vulnerability assessment and identified a significant number of liabilities in the recovery, storage and transportation of product. The assessment highlighted key weaknesses in the security resource, systems, policies and procedures.

The company had reportedly suffered loss from internal and external criminal elements and, under the existing operating infrastructure, it was felt unlikely that further losses could be prevented.

A Security Support team was deployed for a period of six months to stabilise the security operation whilst an agreed improvement strategy was developed and implemented.

During this period, we assumed overall management of the security operation whilst vulnerabilities were addressed and a platform for effective security operations was put in place.

Following implementation of the new security strategy, the client has reported a significant improvement in the recovery of product.

Following the decision of a South African government to contract out the management of a state owned mine, officials identified an urgent need to address reported large-scale theft of product and a requirement to develop controls to assure government royalties through increased transparency of recovery and reporting processes.

We were engaged to develop and implement a security programme to reduce the large-scale organised theft of product. Applying a proven mine security concept was instrumental in identifying numerous risks to the mining operation. Structured control mechanisms reduced the level of criminal activity and provided accountability throughout the recovery process.

This improvement programme addressed the fundamental risks that threatened the longevity of the mining operation

President Stores had traded for over fifty years as a high-end ladies fashion retailer, but as a result of reduced sales, poor credit and declining profit margins, they experienced financial difficulties and commenced with Business Rescue proceedings.

Unprofitable stores were closed, and various stores were sold, as well as initiating and intensive debt collection process.

The outcome was that secured creditors were paid in full, and a successful business rescue was achieved.

Matuson & Associates received the Turnaround Management Association of South Africa runner up award in the small to medium Business Rescue category in 2014 for this successful Business Rescue.

This retail entertainment company was placed in Business Rescue, primarily due to a depressed economic climate, specifically within discretionary retail product categories such as music, gaming and movies.

As a result of the majority of the 25 stores no longer trading profitably, leases were cancelled or renegotiated and the head office was relocated, thereby decreasing monthly fixed costs.  Retrenchment of staff and where possible voluntary retrenchment agreements were entered into with full severance being paid, and inventory was consolidated.

To make the Plan attractive to ensure its successful adoption and implementation, a cash contribution was secured from the shareholder.

This successful restructuring allowed the company to continue to exist on a solvent basis. Creditors received a higher dividend than they would have received in the event of liquidation and approximately 240 jobs were saved.

The company, a national discount chain selling a wide range of merchandise experienced losses as a result of a combination of factors including increased distribution costs, margins steadily declining, the recession and downturn in the global economy and increased competition. 

Matuson & Associates were able to secure post commencement funding (PCF) to continue trading, and maintained continuity of stock from suppliers.

The business was successfully sold with value being realized for creditors in excess of what would have been achieved in a liquidation.

Matuson & Associates received the Turnaround Management Association of South Africa runner up award in the medium to large Business Rescue category in 2014 for this successful Business Rescue.

Umnotho weSizwe Resources (Pty) Ltd (“UWR”), based in South Africa, owns and operates a chrome and platinum group metals mine with proven reserves of 20 million tons of premium grade chrome.

UWR began developing the mine in 2010 and started production in April 2011. However operational challenges as well as poor commodity prices led the shareholder to place the company into Business Rescue during February 2013, in terms of Section 131 of Chapter 6 of the Companies Act.

A refinance agreement was put in place to settle all pre-commencement claims and fund the ongoing running of the mine whilst the business rescue plan was implemented.  Operational changes to the mine were implemented including, as well as finding a new investor and restructuring the existing bank debt.

The mine has now changed name and is currently operational and profitable and contributing to the local economy in a meaningful manner.  

Evraz Highveld is the second largest steel manufacturer in South Africa. It is the country’s only producer of heavy structural steel products and only one of five such companies in the world.

In 2015 the Board and management advised that the firm did not have sufficient funding to meet its financial obligations for the short term as a result of historical operational and financial difficulties and extremely difficult steel and vanadium market conditions. It was resolved to place the company into Business rescue.

Initially an accelerated M&A process was entered into, in order to find a strategic investor, and ways of reducing costs were implemented.  Several independent environmental specialists were appointed to evaluate and assess the potential environmental liability and a  rotational lay off agreement was entered into with the unions,  and later, a full retrenchment of all the staff.

In an attempt to preserve value, an application was submitted to the International Trade Administration Commission (“ITAC”) for import price protection. Several private and governmental entities were approached in order to obtain post commencement funding.

The process is currently still underway.

In 2015, the board of directors and management of Optimum Coal Holdings and Optimum Coal Mine resolved to place both the companies in Business Rescue due to operational and financial difficulties and extremely difficult coal market conditions.

We were able to negotiate on supply contract pricing as well as entering into an accelerated sales process in order to find a strategic investor.

A strategic investor was found to settle the senior bank debt of R2.5bn and over 3 000 employee and contractor jobs were saved.

Ellerine Furnishers (Pty) Ltd, a retailer of furniture and household appliances , commenced with Business Rescue in 2014. This has been the largest Business Rescue to date, based on the Public Interest score of the Company. The firm employed almost 8000 people and had operations in six African countries, comprising over 1000 stores.

In 2010 the provision of credit and financial services component was sold to African Bank. This resulted in a significant decrease in the Company’s income and profitability. A decision was taken that no further funding would be provided by ABIL or African Bank in August 2014 and it was thereafter resolved to place the company into Business Rescue.

Ellerine Furnishers held a deposit of R472million with African Bank that would have been utilised as Post Commencement Funding (PCF). However, the Bank was placed under Curatorship less than a week after the commencement of the Business Rescue. With no accessible funds in the bank accounts, there was an urgent need to secure PCF

PCF was eventually secured after extensive discussions with African Bank. Store closures, realisation of stock and sales of part of the business have all been carried out, saving approximately 2000 jobs to date.

The dividend paid to creditors to date has far exceeded the ‘best case’ dividend that creditors would have received in liquidation and it is estimated that the final dividend will be approximately 42c in the Rand.