Heavyweight business consortium set up to help save SMEs hit by Covid-19 fallout
A consortium of South Africa’s leading law, consulting and business turnaround specialists have partnered to offer pro bono services to distressed businesses, including SMEs, affected by the coronavirus and other economic fallout.
The COBRA war room (COvid-19 Business Rescue Assistance) has been set up to serve businesses that need urgent help and is a collaboration between four South African companies which will offer certain pro bono services for the duration of the outbreak and beyond.
“We know that the South African government will do everything it can to assist struggling businesses in the wake of the coronavirus. However, the harsh reality is that many businesses, especially the more vulnerable small and micro businesses, will take a huge knock in the coming months. This will come either directly as a result of shutdowns and restrictions, or indirectly as a result of the struggling global economy. This consortium aims to limit the number of insolvencies and job losses over the coming months through preemptive rescue and turnaround interventions,” explains Ian Fleming, Managing Director of Engaged Business Turnaround and co-founder of the collective.
Business Rescue and restructuring specialist, Engaged Business Turnaround is joined by multi-disciplinary law firm, Schindlers Attorneys; one of South Africa’s largest independent management consulting firms, IQ Business; as well as Sirdar Group, Envision Advisory Services, Agility and Adept Advisory.
The collective has made available several hundred professionals with extensive insight and experience in business turnaround, legal and accounting expertise, as well as business management and financial modeling skills.
The team has made key interventions in the turnaround process free of charge. This includes the completion and filing of forms with CIPC to place the distressed firm into business rescue, as well as the appointment of the business rescue practitioners.
A means test will also be done pro bono to determine what discount the firm will qualify for when it comes to the business rescue and legal fees.
At the end of the process the administration of taking the company out of business rescue will also be done for free. In the worst-case scenario, the filing of the court liquidation application as well as the liquidation oversight will also be done pro bono.
“While every company has unique circumstances, the services the COBRA collaboration are offering pro bono may be worth in excess of R50,000 per business. The means test will also aim to ensure that companies looking for our help will pay only what they can afford for the other services during the process,” explains Fleming.
“We have gathered South Africa’s finest skills to assist our local businesses when they need it most. Having access to top-quality advisors could make a significant difference to a struggling company, uncertain of how to save their operations. We aim to help hundreds of local businesses ride out the worst of the coming storm, and if we can’t save every business, at least we will ensure the best outcome for their staff, creditors and stakeholders,” says Maurice Crespi, managing partner at Schindlers Attorneys.
The International Labour Organisation (ILO) has warned that as many as 25 million job losses could be suffered as a result of the pandemic, more than the 2008/2009 financial meltdown. However, with coordinated effort, the Geneva-based organisation believes this number could be curtailed to just 5.3 million.
“Early intervention is key to ensuring the best outcome for companies in distress. Unfortunately, many business owners simply don’t know where to turn when they find themselves in difficulty. By placing all the services they might require under one roof we hope to make it not only more affordable, but more accessible to our local companies during these difficult times,” says Fleming.
The war room will also be creating useful content to help educate businesses by producing advice articles written by professionals. In addition, there will also be a daily open access webinar where a panel of experts in various disciplines will discuss ways to deal with the challenges of our new business normal in the age of the coronavirus.
To read more about the services and to tune into the webinar series, business owners can visit http://cobra.org.za