West Pack applies for business rescue to save 1 000 jobs

The high capital costs of opening new stores in search of market share gains by West Pack Lifestyle has seen the company resorting to voluntary business rescue processes to keep the group afloat and save more than 1 000 jobs. A Business Day report says the company – which has 52 stores across SA, Lesotho, eSwatwini and Namibia – said in its business rescue application, it was unlikely to pay its debts as and when they fell due for payments in the ensuing six months. CEO Jose Da Silva flagged SA’s low economic growth and load shedding as some of the factors that led to the company’s financial woes. The company has appointed Matuson & Associates, whose most recent high profile job was rescuing SAA. Some of the options the business rescue practitioners (BRPs) will pursue in a bid to keep the company afloat will be the sale of non-core assets, reduction of overhead expenses, streamlining the company’s procurement processes and looking to getting the product mix right. The BRPs told the group’s creditors at the first meeting held last week that the company had a valuable brand and market position, which could be preserved through a successful business rescue process. It said the success of the process would depend on, among others, the availability of post-commencement finance. ‘We believe that the business rescue process will provide a reasonable prospect in achieving a better outcome for all stakeholders than an immediate liquidation,’ they said. The BRPs are expected to produce a business rescue plan by the end of August.