Business liquidations soared 44.8% in the year to August 2022, data from StatsSA showed, while fewer businesses entered business rescue in a clear sign that many are assessing their financial positions too late.
This is according to Eric Levenstein, director and head of the Business Rescue, Restructuring and Insolvency practice at Werksmans Attorneys, who said: “Even though 2022 is far from over, there are significantly fewer new business rescue proceedings so far this year compared to last year.
In the year to June 2021, 279 companies entered business rescue in South Africa, while in 2020 the number was 206. The Statistics South Africa Liquidations Report for the year to August 2022 showed that liquidations soared by 44.8%. “In August this year alone, more than triple the number of companies were liquidated, than were placed in business rescue,” Levenstein noted.
Per the CIPC report, since the inception of business rescue in 2011, there are currently 1,649 active business rescue proceedings. Approximately 4,370 companies have entered business rescue, with 19% reaching substantial implementation. From the inception of business rescue, only 546 business rescues have ended in liquidation.
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