Abstract
The recent Western Cape high court decision of Trevo Capital Ltd and Others v Steinhoff International Holdings (Pty) Ltd and Others (2833/2021) [2021] ZAWCHC 123 (2 July 2021) considered two instances of financial assistance in terms of section 45 of the Companies Act 2008 in the Steinhoff group. The court had to consider if the respondent complied with the requirements of section 45 of the Companies Act prior to issuing the security in 2014 to a related company, and whether the subsequent amendment or replacement of that exposure in the course of debt restructuring constituted the provision of new financial assistance in terms of section 45 of the Act. This case is important because it clarifies and provides meaningful guidance on certain transactions that fall within the scope of section 45. This study argues that there are several uncertainties pertaining to the application of section 45 and will traverse the legal principles of financial assistance authorised by a company to its related or inter-related companies or corporations, and will further make a proposal for its reform or amendment.
Keywords: Inter-company financial assistance; intra-group financial assistance; debt restructuring; intra-group guarantees; Section 45 of the Companies Act 2008.