Business rescue is a thriving cottage industry in South Africa’s peculiar insolvency ecosystem. It is often mentioned but little understood — just like the largely opaque role of the business rescue practitioners (BRPs).
For some, a BRP is an architect of comebacks. For others, the BRP is an overcompensated empty suit with a licence to kill. This enigmatic, fast-growing and rarely celebrated profession turns 15 this year and is still at pains to define itself. It also needs to dispel the notion that BRPs romp through a legally blurred Wild West with reckless abandon.
Until Chapter 6 of the Companies Act created the concept and practice of business rescue, closure of a bankrupt private or listed company was swift and ruthless. A failed company was subject to judicial management, resulting in liquidation, with creditors the first and often the only parties to benefit.
The legislation, implemented in 2011, aimed to protect all stakeholders, not just creditors. This was both imaginative and sensible. Business rescue can insulate a firm from litigation, debt repayment and liquidation for the duration of the process. It allows for methodical restructuring that would be impossible in ordinary market conditions.
Ideally, business rescue entails the development of a plan to restructure a company’s affairs “in a manner that maximises the likelihood of the company continuing in existence on a solvent basis”. If that is not possible, it aims to deliver a better return for creditors or shareholders “than would result from immediate liquidation”.
That certainly sounds good in principle.
“In terms of an economy and the life of a country, it’s relatively new,” says Siviwe Dongwana, co-founder and MD of accounting firm Adamantem, and one of two BRPs for SAA, which underwent business rescue from 2019 to 2021. “The name itself, ‘rescue’, contemplates an opportunity to remedy something. It has the potential to be an instrument of social good.”
The process begins when a company’s board resolves to enter business rescue and files with the Companies & Intellectual Property Commission (CIPC). The board identifies a BRP and the CIPC confirms the appointment. Alternatively, “affected persons” (creditors, shareholders or employees) may take the matter to court, where a judge decides whether to place the entity in business rescue. If they do, the court names a BRP.
Directors must provide the BRP with a statement of affairs within five days of this appointment. Within 10 days, the BRP holds meetings with creditors and employees to assess the prospects of rescue. Creditors and employees then form committees. The BRP has 25 days to develop a plan to rescue the company.
If maintaining the concern proves unviable, the BRP must decide whether business rescue will result in a better return than immediate liquidation. If there is no reasonable prospect of rescue, they are obligated to file for liquidation.
If only it were as easy as it sounds.
Rescue, by definition in the act, should be finished in three months, though it never is
— Colin Strime
“Rescue by definition in the act should be finished in three months, though it never is,” says Colin Strime of Fluxmans Attorneys. “It’s impossible for someone to come from outside and solve its problems in three months.”
Dongwana agrees. “You know you are not going to publish a plan in 25 days. Here’s an idiocy, that a business operating on a Pty Ltd basis has the same number of days to publish a business rescue plan as the South African Post Office.”
Business rescue is complicated. Like many BRPs, Dongwana travels with a copy of the Companies Act & Regulations. Juta’s 22nd edition is 882 pages long and weighs nearly a kilogram.
Business rescue, says Dongwana, can feel “like stepping into a crowded emergency room after a major accident. The focus is not to determine how the injuries happened. It is to identify the critically wounded, stabilise them and prevent further deterioration. The loved ones pacing the hospital corridors ― for them, it’s a crisis they never imagined facing.
“As with medical professionals, for the BRP it is all about controlled intensity: making the micro-decisions of significance with a calm head; conducting triage, assessing what’s life-threatening; and where immediate intervention will make the biggest difference.”
Alison Timme is MD of restructuring advisory at Kroll, a New York-based financial risk and advisory firm that operates in South Africa. Timme says that “creditors or lenders don’t understand why you as a BRP haven’t solved a problem in two weeks. The answer often is: ‘Well, this was a problem that was brewing for five years.’”
Timme and Stefan Smyth, also an MD at Kroll, were appointed as BRPs for Ster-Kinekor, the continent’s largest cinema company, when it had to close in March 2020 because of the Covid lockdowns.
Smyth says the cinema chain was already struggling “with the advent of streaming, and at the time we had acute load-shedding, and then you had Covid. The odds were really set against it.” Like airlines and restaurants, the cinema business was in effect instantly outlawed when Covid struck.
Nearly all Ster-Kinekor’s 49,000 cinema seats are in shopping malls where it is an anchor tenant. Timme and Smyth believed its strong brand identity and mall culture would outlive the pandemic. For BRPs, says Timme, “there are key principles. One is recognition of the stakeholder universe. ‘Who’s your stakeholder group? Who are you dealing with here?’
“With Ster-Kinekor we had highly reputable, well-known landlords. They had an interest in getting this out the way. Did we have debates? Did we have to use moratoriums? Did we have to come up with creative solutions? Yes, we did all those.”
Timme says a Covid loan and permission to use existing overdrafts proved vital. “And we knew we needed forgiveness from landlords. Underpinning it all was an ongoing ability to fund the rescue, and that looks very different depending on the type of rescue.”
Ster-Kinekor’s 21-month rescue wrapped up in October 2022 and 43 months later it remains a going concern. It’s a business rescue success story ― but that doesn’t mean it’s easily replicable.
How does the governance aspect of business rescue work?
Essentially, the creditors of a company become its shareholders and the BRPs assume the powers of a CEO. They must manage an entity that is in distress and in need of capital. The board of directors loses its control but remains in office, under the authority of the BRP. This is often a source of tension.
Credit issued to a firm in business rescue is called post-commencement finance (PCF). To incentivise urgently needed capital injections, PCF providers outrank earlier creditors in the payment waterfall when the time comes to settle debts. However, PCF providers know the likelihood of very low return in the event of liquidation.
PCF providers hold tremendous sway over BRPs. It is in their interest to pressure BRPs to restructure a firm to their liking, perhaps muddying BRPs’ obligation to act as impartial officers of the court.
BRPs have enormous powers, but their work is seldom scrutinised in detail. They are expected to redress corruption and incompetence, and secure workers’ livelihoods where possible, but they can wreak havoc and just move on to the next commission. Unethical BRPs might slow-walk proceedings to maximise billable hours. They can be deployed cannily to skirt debt obligations, or pre-empt legal action
BRPs are usually compensated handsomely even if the business rescue fails.
According to Regulation 128 of the Companies Act, tariffs are determined by the company or the court at the time of a BRP’s appointment and are contingent on BRP seniority and the size of the concern. The tariff may not exceed R1,250 an hour (maximum R15,625 a day) for small companies, R1,500 (R18,750) for medium companies and R2,000 (R25,000) for large companies.
However, BRPs are compensated for costs and the act permits “further remuneration”. This means tariffs can exceed the act’s prescriptions, exorbitantly so.
When agri-processing giant Tongaat Hulett entered business rescue in October 2022, it agreed to pay BRPs Trevor Murgatroyd and Peter van den Steen R4,400 an hour (R55,000 a day). The company said it recognised that the hourly rate in the regulations “is not market-related and does not cater for annual escalations”. At stake were the livelihoods of at least 18,000 sugar-cane workers in KwaZulu-Natal.
After three years and six months, the Tongaat business rescue is still a work in progress, though it narrowly avoided final liquidation in April this year thanks to a R200m injection by the Industrial Development Corp. This extended Tongaat’s PCF facility to June 2026, increasing it to R2.5bn. The provisional liquidation application was adjourned and is now set for a hearing on June 17 and 18.
The qualifications demanded of BRPs are straightforward. Barring conflicts of interest, a BRP must simply be “a member in good standing of a profession subject to regulation by a regulatory authority.” The CIPC licenses BRPs and lists 329 active practitioners.
Since 2018, the South African Restructuring & Insolvency Practitioners Association (Saripa) has served as the regulatory body overseeing BRP conduct. Saripa counts 150 BRPs as registered members.
The 40-year-old organisation calls on members to act with “the highest integrity” and disciplines those who violate its code of ethics. It prescribes a range of benchmark degrees — LLB, BCom, BProc, BA Law, BJuris, or “any relevant Level 7 qualification” — to gain accreditation.
In 2021, the University of Pretoria launched an MPhil degree specialising in insolvency and business rescue, the only programme of its kind in South Africa. Saripa actively promotes business rescue education through workshops, conferences and a 10-month programme in South African business rescue.
There are issues where we could amend the act. But it’s robust. It works
— Eric Levenstein
Eric Levenstein, head of insolvency and business rescue at Werksmans Attorneys, chaired Saripa from 2019 to 2024. He says the BRP coursework has matured with the profession.
“To a large degree they’re psychologists,” he says. “A BRP has to calm the waters, particularly on day one. They must deal with trade unions, with employees likely to lose their jobs, and try to get everyone singing from the same hymn sheet, so that they can move towards a plan that will be supported by all stakeholders.”
Levenstein speaks proudly about “the village” of BRPs in South Africa. “There are issues where we could amend the act,” he says. “But it’s robust. It works.” Organised neatly on the boardroom table in front of him are a well-thumbed copy of the act and printouts of CIPC insolvency figures. He reads excerpts aloud with gusto. As if addressing the Sandton skyline itself, Levenstein concludes “the statistics speak for themselves”.
His confidence in the system is not shared across the board.
Prof Marius Pretorius specialises in rescue and insolvency at the University of Pretoria’s department of business management. “BRPs are not qualified, most of them,” he says, “especially when they come from an insolvency background. We have too few BRPs with business knowledge.” For Pretorius, business rescue is plagued by incompetents unable or unwilling to confront assumptions that routinely produce bad outcomes.
“There’s an approach bias,” he says. “You have a healthy concern, then it’s a business that might trip and fall, then it becomes distressed, then it’s in severe distress. It must go to the ICU and then it’s dead. Filing early for business rescue is a big issue, because people don’t want to acknowledge that they have a problem.” As a result, says Pretorius, the bulk of business rescues happen “in the morgue”.
Levenstein encourages clients to engage in business rescue early to address financial distress before the concern becomes unsalvageable. He says stakeholders have become more familiar with business rescue thanks to Saripa’s outreach work. “The banks need to have confidence in what BRPs are doing,” Levenstein says. “I do think corporate South Africa understands business rescue a lot better than five years ago, certainly than 15 years ago.”
Dongwana disagrees. He recalls creditors trying to make sense of the business rescue process. “They struggle to understand what is contemplated in a plan. They need a lawyer and an accountant to help them through. And spare a thought for a guy in some town in the Northern Cape who is in distress and his lawyer says: ‘I’ve just qualified, I’m a BRP, I can run this thing for you.’”
Strime, who is Fluxmans’ joint CEO specialising in business rescue and insolvency, says that “if you’re purely a lawyer, it’s not easy to turn a business around just with legal skills. There’s a handful of excellent BRPs and then there are lots of guys who are classified as BRPs, but they don’t have the skills.”
How successful has the business rescue approach been in its 15 years of operation?
In an October 2018 article in the South African Journal of Economic & Management Sciences, Rajendra Rajaram, Anesh Singh and Navitha Sewpersadh refer to the “low success rate of business rescue” (12%), between 2011 and 2017. They found that “failures are mainly attributable to the skills deficit of the BRP or the practitioners’ abuse of legislation. There is also a negative impact of appointing a liquidator as a BRP.”
In 2022 the CIPC issued a report on business rescue proceedings from inception in May 2011 to December 2021, a “10-year scorecard”.
The report shows 4,215 filings for business rescue, with 511 (12%) ending up “unsuccessful” — that is, collapsing into liquidation. It says 766 (18%) business rescues ended as “a success story”. Though “success” is not defined, it implies that the companies survived in some form.
In addition, 517 business rescues were terminated because the enterprise “was not financially distressed”. Analysis of the CIPC report by Haroon Laher of legal firm Fasken argues that “these enterprises were able to continue operating. These should be added as success stories, as their improved financial status could be due to several reasons, including the intervention of the BRP”.
Adding that number to the success stories, says Laher, “would increase the business rescue success story from 766 to 1,383 out of 4,215” in the first decade, which can be interpreted as a 33% success rate.
The key question is how many companies that submitted to business rescue would not otherwise have been liquidated, to which the answer is “very few, if any”. By that criterion, even a 10% success rate would vindicate the legislation.
What we’ve seen frequently is that these guys become a law unto themselves
— Matthew Parks
Of course, statistics are of no comfort when business rescue is not fruitful.
Matthew Parks, Cosatu’s parliamentary co-ordinator, describes business rescue as “a long irritant. We’ve seen many companies closing and, inevitably, it’s workers who get pickpocketed. In the beginning, we had a bit of hope that these BRPs could help turn things around. We’ve been disappointed almost every time.
“What we’ve seen frequently is that these guys become a law unto themselves,” says Parks. “There’s little accountability. Even when they wind up assets, it’s workers who are at the back of the queue in terms of saving jobs and getting monies owed.”
One trade union that was excited about business rescue at inception was the Southern African Clothing & Textile Workers’ Union (Sactwu), but its experience has been mixed.
Etienne Vlok, Sactwu’s national industrial policy officer, says: “We’ve seen horrific examples where processes just continued ad infinitum and the only people who gained from it were the BRPs.
“But we’ve also had hard-working, collaborative BRPs who really try to save businesses. We’ve seen excellent outcomes, and processes that may not have been successful, but at least there was a sense that the chance was given. If you get a bad BRP, then you’re doomed from the start.”
Vlok offers the example of Phuthaditjhaba’s now-defunct SA Cloth. Once the largest standalone clothing factory in South Africa, SA Cloth employed 1,700 workers in the eastern Free State before entering business rescue in 2021.
“Phuthaditjhaba is not a glamorous area, but you would at least think that the BRPs would spend time there. In many cases, I don’t know if BRPs go [to a company] at all. From their Joburg offices, they try to rescue a business somewhere in a rural area and it just doesn’t work.
“The SA Cloth plan, when it came out, was worth absolutely nothing,” Vlok says. Workers felt compelled to vote for it anyway. “If you don’t keep on voting for it, then that’s the end.”
The firms Sactwu deals with don’t often have high-value assets. SA Cloth’s cutting machines sold for about R2,000 each at auction. “Creditors will talk about getting a few cents in the rand. For workers, it’s a few cents of a few cents,” says Vlok.
Business rescue and insolvency work can be extremely dangerous.
Prominent liquidators Cloete Murray and his son Thomas were murdered in a targeted attack in March 2023. Cloete had been the court-appointed liquidator for state capture-linked Bosasa (now African Global Operations). Later the suspect in the Murray murders was himself gunned down.
In September 2025, Bouwer van Niekerk (43) was assassinated at his Saxonwold offices. He had been working on a liquidation matter for NTC Global Trade Fund, widely believed to be a Ponzi scheme. Chillingly, Van Niekerk had cited the Yeats poem The Second Coming in an article he wrote for News24 after the Murray murders. Van Niekerk also referred to “the mafia state that South Africa has become”. Among the Yeats lines he quoted: “The blood-dimmed tide is loosed, and everywhere / The ceremony of innocence is drowned”.
DA MP Ian Cameron, chair of the parliamentary portfolio committee on police, says: “Business rescue and insolvency frameworks depend on practitioners being able to act independently and without fear. Where murders are potentially linked to organised crime or economic interests, the absence of visible progress sends a damaging signal that the risk of consequence is low.”
Jo-Anne Mitchell-Marais, turnaround and restructuring leader at Deloitte and national chair of Saripa, says: “Nobody can be blamed if they resign when they face such threats.”
By far the biggest business rescue projects have been at state-owned enterprises (SOEs), including SAA and the Post Office. In the 1990s and early 2000s, most large SOEs were corporatised, which means they also qualify for business rescue if financially distressed.
SAA exited business rescue in 2021 and was relaunched as a leaner airline with fewer routes and staff. The rescue depended on huge government support. R7.8bn was allocated to core rescue funding, and another R5.5bn for working capital and bridging finance. In all, around R23.7bn was injected across the rescue window, including legacy debt repayments and emergency liquidity.
Had SAA been a private company, BRPs might have found it impossible to attract funding on that scale.
It is worth noting that business rescue proceedings are not intended for “terminally [or] chronically ill” companies, to use the phrasing in an influential 2012 judgment by Joburg high court judge Moroa Tsoka. “They are for ailing corporations, which, given time, will be rescued and become solvent.”
