Advisory company to host Zim business rescue forum

FINANCIAL advisory firm, DEAT Capital Zimbabwe is set to host a high-level Zimbabwe Business Rescue, Turnarounds and Insolvency Forum in February that seeks to cast spotlight on the role of turnarounds, corporate renewal, distressed funding, and corporate governance.

The one-day engagement is planned for February 29 and is expected to attract around 200 delegates drawn from State-owned enterprises (SOEs), public sector agencies, advisory firms, listed companies, fund managers, and insolvency and turnaround practitioners.

DEAT Capital is a Zimbabwe trade and investment firm with a focus on logistics infrastructure and management in Southern Africa, the development of smart cities, renewable energy projects, end-to-end logistics solutions

According to the concept paper, DEAT Capital Zimbabwe managing director, Mr Nicky Moyo said the conference will focus on the role of turnarounds, corporate renewal, distressed funding, and corporate governance.

He added that it is critical to also cast a spotlight on business rescue processes. Several entities have gone under business rescue.

“Business rescue refers to proceedings that facilitate the rehabilitation of a company that is in financial distress.

“The stigma surrounding business rescue prevents companies from seeking pre-emptive help. In cases where business does initiate the process, this often leads to increased risk due to other companies’ reluctance to conduct business with them. Banks, for instance, are unwilling to provide any form of finance as a bridging facility to entities under business rescue,” said Mr Moyo.

Mr Moyo said the only real form of assistance companies under business rescue can expect to receive from financial institutions is “defensive funding”.

“This option is only offered when a bank or lending institution has no choice but to continue funding a business to protect their own security or position — an action further entrenched by the fact banks will not “bail out” other banks that provide post-commencement finance for that purpose.

“A business rescue might achieve a better return than a liquidation for several reasons. These include post-commencement finance being made available to fund the process, which is given a preferred status, a better sale value for assets, and a better return for employees.”

Senior Government officials, chief executives and players in the financial sector are expected to attend.-chronicle