Status of Business Rescue Proceedings in South Africa
March 2016
1.
Purpose of the Business Rescue Proceedings Report:
The purpose of this report is to provide a statistical overview of the status of business rescue proceedings within South Africa based on
applications submitted to the Companies and Intellectual Property Commission.
The report below covers the period of 1 May 2011 (inception of Chapter 6 of the Companies Act, 2008) to 30 March 2016. This report does
not provide statistical comparisons with previous years.
*Notes to report:


For purposes of determining the volume of proceedings started, invalid filings are disregarded since in such instances the
proceedings never commenced.
Practice note 3 of 2014 were issued during July 2014. Such practice note indicates the documentary and content requirements for
CoR123.1, CoR125.2 and CoR125.3.
2. Business Rescue Proceedings Status:
The below table reflects the status of commenced business rescue proceedings from inception of business rescue on 1 May 2011 to 31
March 2016.
Operational BR Proceeding Applications
Business Rescue Proceedings Started
Invalid filings
Business Rescue Proceedings Ended
CoR125.2
CoR125.3
Liquidation
CO_Set Aside BR
Nullities (Proceedings started but was declared a
nullity)
Active as at March 2016
Active as at December 2015
Active as at March 2015
2011 - 2012
383
60
297
69
69
50
3
2012 - 2013
442
26
261
88
92
47
7
106
86
88
120
27
181
193
212
2013 2014
2014 2015
2015 2016
total
413
21
224
68
83
52
3
415
42
165
58
46
34
2
494
15
72
36
20
14
0
2148
0
1019
319
310
197
15
18
189
206
243
25
250
275
285
17
422
330
N/A
193
1129
1092
883
From the 2148 cases (invalid filings are not included since the proceedings never commenced) for which business rescue proceedings
commenced: 193 proceedings became a nullity in law;
 319 proceedings was terminated by way of filing a Notice of Termination (CoR125.2);
 310 proceedings was substantially implemented by way of filing a Notice of Substantial Implementation (CoR125.3);
 197 proceedings ended up directly in liquidation without a Notice of Termination (CoR125.2) being filed;
 15 proceedings the court set aside the business rescue proceedings; and
 1129 proceedings is still in business rescue.
The dti Campus (Block F - Entfutfukweni), 77 Meintjies Street, Sunnyside, Pretoria l P O Box 429, Pretoria, 0001
Tel: +27 12 394 9973 | Fax: +27 12 394 1015 | Call Centre: 086 100 2472
Email: tobeconfirmedbyclient@cipc.co.za | Website: www.cipc.co.za
Diagram 1 indicates the percentage comparison between the different statuses of commenced business rescue proceedings.
STATUS OF COMMENCED BR PROCEEDINGS AS AT
31 MARCH 2016 (EXPRESSED AS A %)
CoR125.2
15%
CoR125.3
14%
Active
52%
Liquidation
9%
CO_Set Aside
BR
Nullities
1%
9%
3. Business Rescue Proceedings Started Per Category Of Entity:
The below table indicates the volume of commenced business rescue proceedings for each entity category.
BR proceedings started
Public Companies
Private Companies
Incorporated Companies
Non Profit Companies
Close Corporations
Total as at 31 March 2016
Total
83
1354
5
5
701
2148
2011 - 2012
53
241
0
0
89
383
2012 - 2013
10
281
3
0
148
442
2013 -2014
7
260
0
2
144
413
2014 -2015
8
267
0
2
138
415
Diagram 2 indicates the percentage comparison for the different entity categories of commenced business rescues.
CATEGORY OF ENTITIES STARTING BR
PROCEEINGS AS AT 29 FEBRUARY 2016
(EXPRESSED AS %)
Close
Corporations
33%
Incorporated
Companies
0%
Non Profit
Companies
0%
Public Companies
4%
Private
Companies
63%
The dti Campus (Block F - Entfutfukweni), 77 Meintjies Street, Sunnyside, Pretoria l P O Box 429, Pretoria, 0001
Tel: +27 12 394 9973 | Fax: +27 12 394 1015 | Call Centre: 086 100 2472
Email: tobeconfirmedbyclient@cipc.co.za | Website: www.cipc.co.za
2015-2016
5
304
2
1
182
494
Business rescue is mostly utilised by private companies. 63% of entities applying for business rescue are private companies while only 33%
are close corporations.
4. Business Rescue Proceedings Started Per Province:
The below table indicates the volume of commenced business rescue proceedings for each of the nine provinces.
Total per
Province
Province (start BR)
Gauteng
Free State
Northern Cape
Eastern Cape
Western Cape
North West
Limpopo
Mpumalanga
Kwa-Zulu Natal
Not Provided
Total as at 31 March 2016
827
62
9
81
282
75
47
61
151
553
2148
2011 - 2012
2012 - 2013
53
11
1
3
44
3
3
5
1
259
383
102
7
2
11
33
9
4
10
6
258
442
2013 -2014
2014 -2015
218
14
0
24
50
24
6
10
53
14
413
2015-2016
215
17
3
15
73
21
15
18
34
4
415
239
13
3
28
81
18
19
18
57
18
494
Breakdown of Entities Starting BR Proceedings as at 31 March 2016 Per
Province (expressed in volume)
2500
2000
Volume
1500
1000
500
0
Gauten
g
Free
State
Norther Eastern Wester
n Cape
Cape
n Cape
North
West
Limpop Mpuma
o
langa
KwaZulu
Natal
Not
Total
Provide
Per
d
Financi
al Year
553
2148
Total per Province
827
62
9
81
282
75
47
61
151
2011 - 2012
53
11
1
3
44
3
3
5
1
259
383
2012 - 2013
102
7
2
11
33
9
4
10
6
258
442
2013 -2014
218
14
0
24
50
24
6
10
53
14
413
2014 -2015
215
17
3
15
73
21
15
18
34
4
415
2015-2016
239
13
3
28
81
18
19
18
57
18
494
The dti Campus (Block F - Entfutfukweni), 77 Meintjies Street, Sunnyside, Pretoria l P O Box 429, Pretoria, 0001
Tel: +27 12 394 9973 | Fax: +27 12 394 1015 | Call Centre: 086 100 2472
Email: tobeconfirmedbyclient@cipc.co.za | Website: www.cipc.co.za
Diagram 3 reflects the overal breakdown for each of the nine provinces as from inception of business rescue expressed as a percentage. It
is clear from the diagrams that 52% of businesses commencing business rescue, resides with Gauteng. Gauteng is followed by the Western
Cape (18%) and then Kwa-Zulu Natal (9%).
BREAKDOWN OF ENTITIES STARTING BR
PROCEEDINGS AS AT 29 FEBRUARY 2016 PER
PROVINCE (EXPRESSED AS %)
Kwa-Zulu
Mpumalanga Natal
4%
9%
Limpopo
3%
North West
5%
Gauteng
52%
Western Cape
18%
Eastern Cape
Northern
5%
Cape Free State
4%
0%
5.
Notice of Termination (CoR125.2) Filed:
5.1. Breakdown of Notice of Termination (CoR125.2) Filed:
The below table indicates the volume of CoR125.2 filed for commenced business rescue proceedings. It should be noted that a CoR125.2
may be received during a specific financial year but the filing of the document will be recorded against the year for which the business rescue
proceedings commenced. Example, the CoR125.2 may be filed January 2015 but the proceedings commenced during the 2011-2012 financial
year and therefore the CoR125.2 will be recorded against the 2011-2012 financial year in the below table.
Termination Type
Termination - Unspecified
Termination - Liquidation
Termination - Not distressed
Termination - Plan not accepted
Termination - BRP personal
Termination - Plan not published
Total Terminations filed as at 31 March 2016
Total Terminations filed as at 31 December 2015
Total Terminations filed as at 31 March 2015
2011 2012
total
125
99
73
16
5
1
319
276
226
2012 2013
44
16
6
3
0
0
69
67
65
2013 2014
26
38
20
4
0
0
88
83
81
2014 2015
24
21
15
7
1
0
68
61
58
20152016
25
8
20
0
4
1
58
52
22
The dti Campus (Block F - Entfutfukweni), 77 Meintjies Street, Sunnyside, Pretoria l P O Box 429, Pretoria, 0001
Tel: +27 12 394 9973 | Fax: +27 12 394 1015 | Call Centre: 086 100 2472
Email: tobeconfirmedbyclient@cipc.co.za | Website: www.cipc.co.za
6
16
12
2
0
0
36
13
N/A
*Notes:
Termination = reason for termination not specified
Termination – Liquidation = BRP terminates proceedings in order for entity to start liquidation proceedings
Termination – Not distressed = BRP terminates proceedings due to the fact that entity is not financially distressed
Termination – Plan not accepted = BRP notifies CIPC that plan was not accepted and no further action was taken by an affected
person to extend the proceedings
Termination – person = BRP notifies CIPC that he is removing/resigning himself from the matter due to personal reasons
Termination – Plan not published = BRP notified CIPC that the plan was not published in order for it to be considered for approval
Diagram 4 reflects the overal breakdown of the main reasons for terminations being submitted.
BREAKDOWN OF TERMINATIONS (COR125.2)
FILED AS AT 29 FEBRUARY 2016 (EXPRESSED AS
%)
Termination
Termination - Plan
not accepted
5%
Termination
- Not
distressed
23%
- BRP
personal
2%
Termination - Plan
not published
0%
Termination
- Unspecified
39%
Termination
- Liquidation
31%
5.2. Age analysis on Terminations (CoR125.2) filed:
The average period for the filing of a CoR125.2 is 8.23 months. 29.02% of terminations are filed within 2 months; 4.73% in the third month,
9.15% in the fourth month, 8.83% in the fifth month and 48.26% in month six or thereafter.
5.3. Liquidation Status of Business Rescue Proceedings Terminated (CoR125.2) (as at 29 February 2016):
An analysis was conducted on the liquidation status of business rescue proceedings for which a CoR125.2 was filed. 17.76% of the entities
went into liquidation and 40.13% is either in annual return deregistration (“in deregistration process”) or finally deregistered (“final
deregistered”) for non-compliance with annual returns. Only 38.14% has an “in business” status.






37% - AR Deregistration;
4% – AR Final Deregistered;
2% – Provisional Liquidation;
7% – Final Liquidation;
5% – Voluntary Liquidation; and
2% – Dissolved
The dti Campus (Block F - Entfutfukweni), 77 Meintjies Street, Sunnyside, Pretoria l P O Box 429, Pretoria, 0001
Tel: +27 12 394 9973 | Fax: +27 12 394 1015 | Call Centre: 086 100 2472
Email: tobeconfirmedbyclient@cipc.co.za | Website: www.cipc.co.za
Diagram 5 reflects the current status of proceedings which were terminated.
POST TERMINATION LIQUIDATION CHECK AS AT 29
FEBRUARY 2016 (EXPRESSED AS %)
Voluntary
AR Final Deregistration
Final
Deregistered
Deregistration
0%
4%
0%
AR
Deregistration
Process
37%
In Business
38%
Business Rescue
Voluntary
4%
Liquidation
Provisional
Final Dissolved
5% Voluntary Solvent
Insolvent Voluntary
Liq
Liq Liquidation Liquidation 2%
1%
0%
2%
7%
* Notes:
It was identified that some entity statuses were not correctly updated upon the filing of the CoR125.2 and therefore some entity
statuses reflect as in business rescue on the register. This is being investigated in order to correct.
6.
Substantial Implementations (CoR125.3) filed:
6.1. Age analysis on Substantial Implementations (CoR125.3) filed:
The average period for the filing of a CoR125.3 on commenced business rescue proceedings is 12.31 months. 9.39% of substantial
implementations are filed within 2 months, 4.21% in the third month, 4.85% in the fourth month, 5.50% in the fifth month, and 76.05% in the
sixth month or thereafter.
6.2. Liquidation Status of Business Rescue Proceedings On Proceedings Substantially Implemented (CoR125.3) (as at 29
February 2016):
An analysis was conducted on the liquidation status of business rescue proceedings for which a CoR125.3 was filed. 6.2% of the entities
went into liquidation and 20.26% is either in annual return deregistration (“in deregistration process”) or finally deregistered (“final
deregistered”) for non-compliance with annual returns. 66.99% has an “in business” status. It is interesting to note that only 1 entity refiled
for business rescue after the previous proceedings was substantially implemented.


20% - AR Deregistration;
1% – AR Final Deregistration;
The dti Campus (Block F - Entfutfukweni), 77 Meintjies Street, Sunnyside, Pretoria l P O Box 429, Pretoria, 0001
Tel: +27 12 394 9973 | Fax: +27 12 394 1015 | Call Centre: 086 100 2472
Email: tobeconfirmedbyclient@cipc.co.za | Website: www.cipc.co.za




0% – Provisional Liquidation;
1% – Final Liquidation;
3% – Voluntary Liquidation; and
0% – Dissolved
Diagram 6 reflects the current status of proceedings which were substantially implemented.
POST SUBSTANTIAL LIQUIDATION CHECK AS AT 29
FEBRUARY 2016 (EXPRESSED AS %)
Voluntary
AR Final Deregistration
Deregistered
3%
AR
1%
Deregistration
Process…
Voluntary
Final
Deregistration…
Liquidation
3%
Voluntary
Insolvent Liq…
Solvent
Voluntary Liq
0% Final
Liquidation
1%Provisional
Business
In Business
67%
RescueLiquidationDissolved
0%
3%
0%
7.
Liquidation Documents Filed:
7.1. Breakdown of Liquidations Filed:
The below table indicates the volume of liquidation applications and court orders filed for entities which commenced business rescue
proceedings without the proceedings being terminated or business rescue plan being substantially implemented. It should be noted that a
liquidation application or court order may be received during a specific financial year but the filing of the document will be recorded against
the year for which the business rescue proceedings commenced. Example, the liquidation application may be filed January 2015 but the
proceedings commenced during the 2011-2012 financial year and therefore the liquidation application.2 will be recorded against the 20112012 financial year in the below table.
Liquidation Type
Dissolved
Final Liquidation
Provisional Liquidation
Voluntary Liquidation
Voluntary Insolvent Liquidation
Voluntary Solvent Liquidation
Liquidation
Total Liquidations as at 31 March 2016
Total Liquidations as at 31 December 2015
Total Liquidations as at 31 March 2015
total
6
92
64
1
29
3
2
197
182
155
2011 - 2012
2
18
9
1
17
3
0
50
50
49
2012 - 2013
4
19
12
0
10
0
2
47
45
44
2013 -2014
0
38
12
0
2
0
0
52
47
41
2014 -2015
0
10
24
0
0
0
0
34
29
21
The dti Campus (Block F - Entfutfukweni), 77 Meintjies Street, Sunnyside, Pretoria l P O Box 429, Pretoria, 0001
Tel: +27 12 394 9973 | Fax: +27 12 394 1015 | Call Centre: 086 100 2472
Email: tobeconfirmedbyclient@cipc.co.za | Website: www.cipc.co.za
2015-2016
0
7
7
0
0
0
0
14
11
N/A
Diagram 7 reflects the overal breakdown of the main liquidation statuses for entities which commenced business rescue proceedings.
BREAKDOWN OF LIQUIDATIONS FILED AS AT 30
MARCH 2016 (EXPRESSED AS %)
Voluntary
Insolvent
Liquidation
15%
Voluntary
Voluntary
Solvent Liquidation
Dissolved
1%
Liquidation
3%
2%
Liquidation
0%
Provisional
Liquidation
32%
8.
Final
Liquidation
47%
Nullities filed:
From the 2148 business rescue proceedings which commenced, 194 was declared a nullity. Therefore, 9% of all commenced proceedings
ended in a nullity.
Diagram 8 indicates the breakdown of the reason for nullities.
BREAKDOWN OF NULLITIES FILED AS AT 29
FEBRUARY 2016 (EXPRESSED AS A %)
Preceding
Resolution
No Notice to Directors No
Liquidation
Authority Lapsed
parties
Matter
0%
1%
9%
1%
Plan not
approved
0%
Nullities
39%
No BR
appointed
50%
The dti Campus (Block F - Entfutfukweni), 77 Meintjies Street, Sunnyside, Pretoria l P O Box 429, Pretoria, 0001
Tel: +27 12 394 9973 | Fax: +27 12 394 1015 | Call Centre: 086 100 2472
Email: tobeconfirmedbyclient@cipc.co.za | Website: www.cipc.co.za
9. Business Rescue Proceedings Started Per Industry:
The below table indicates the volume of commenced business rescue proceedings for each of the classified industries.
Industry
Accommodation and food service activities
Administration and support service activities
Agriculture, forestry and fishing
Arts, entertainment and recreation
Construction
Education
Electricity, gas, steam and air conditioning supply
Financial and insurance activities
Human Health and Social Work
Information and Communication
Manufacturing
Mining and quarrying
Not Provided
Other Activities
Professional, scientific and technical activities
Public Administration and defense services
Real Estate Activities
Transportation and Storage
Water supply, sewerage, waste management and remediation
activities
Wholesale and retail trade, repair of motor vehicles and motorcycle
Total
40
21
34
7
100
24
46
37
26
43
147
54
32
6
17
7
31
28
2014-2015
15
12
7
2
34
2
0
24
0
8
25
26
25
4
13
0
26
21
2015-2016
25
9
27
5
66
21
46
13
26
35
122
28
7
2
4
7
5
7
35
49
0
45
35
4
The dti Campus (Block F - Entfutfukweni), 77 Meintjies Street, Sunnyside, Pretoria l P O Box 429, Pretoria, 0001
Tel: +27 12 394 9973 | Fax: +27 12 394 1015 | Call Centre: 086 100 2472
Email: tobeconfirmedbyclient@cipc.co.za | Website: www.cipc.co.za
%
5%
3%
4%
1%
13%
3%
6%
5%
3%
5%
19%
7%
4%
1%
2%
1%
4%
4%
4%
6%
6%
Wholesale and retail trade, repair of motor vehicles and…
4%
Water supply, sewerage, waste management and…
4%
Transportation and Storage
4%
Real Estate Activities
Public Administration and defense services
1%
2%
Professional, scientific and technical activities
Other Activities
1%
4%
Not Provided
7%
Mining and quarrying
19%
Manufacturing
5%
Information and Communication
3%
Human Health and Social Work
5%
Financial and insurance activities
6%
Electricity, gas, steam and air conditioning supply
3%
Education
13%
Construction
Arts, entertainment and recreation
1%
4%
Agriculture, forestry and fishing
Administration and support service activities
Accommodation and food service activities
*Notes:
3%
5%
As from 1 August 2014 the primary industry within which the entity is conducting business is recorded. No information available
on industry prior to such date.
The dti Campus (Block F - Entfutfukweni), 77 Meintjies Street, Sunnyside, Pretoria l P O Box 429, Pretoria, 0001
Tel: +27 12 394 9973 | Fax: +27 12 394 1015 | Call Centre: 086 100 2472
Email: tobeconfirmedbyclient@cipc.co.za | Website: www.cipc.co.za