Abstract
LL.M. (Commercial Law)
With the onset of the new corporate rescue regime in South Africa, the impact of the
current post commencement finance culture in the country could have adverse effects
on such proceedings. Due to the growing number of financially distressed entities,
this topic, and in particular, turnaround funding in developing countries like South
Africa is becoming more and more relevant.
Due to the juvenility of the current legislation regarding business rescue proceedings,
there are still issues that need addressing. One of the major stumbling blocks of these
proceedings stems from a lack of post commencement finance. In comparison to
other, more established jurisdictions, South Africa seems to be behind in the
commercial rescue realm. Thus, an evaluation of post commencement financing in
South Africa is critical in order to determine whether the relationship is positive or
negative in terms of the actual proceedings themselves.
By way of normative methodology this paper will describe the magnitude of post
commencement finance in South Africa as well as address the reasons for the
situation this country finds itself in. Finally an attempt will be made to show the best
way(s) in which to go about creating a culture within the economy that is partial to
participation in the rehabilitation of distressed institutions.
To this end, it appears from the literature and studies undertaken that the post
commencement finance environment is lacking essential components. Through time,
the development and refinement of these applicable provisions and influential factors
will enable the corporate landscape to evolve into a competent dwelling for
companies facing financial woes.