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Edcon said to be in talks for $216 million rescue funding

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Edcon Holdings Ltd. is in talks for as much as ZAR 3 billion ($216 million) in funding to save South Africa’s biggest non-food retailer.

Thursday 24, January 2019

(Bloomberg)--The Public Investment Corp., which oversees state-worker pensions and is Africa’s largest fund manager, may provide ZAR 1.8 billion to assist the company, said people familiar with the matter, who asked not to be identified as the information isn’t yet public. Landlords may contribute another ZAR 700 million through reduced rent charges and banks about ZAR 500 million, they said.

The PIC has received a proposal on Edcon and will decide after subjecting it to investment processes, spokesman Sekgoela Sekgoela said in an emailed response to questions.

“The Edcon board has approved the structure of the proposed recapitalisation plan, and in response lenders have extended waivers to allow time for implementation,” a company spokesman said. “The board fully appreciates the support that is being received from all group stakeholders and the commitment that has been shown.”

The 89-year-old Edcon employs about 21,000 employees in a country where more than one in four people don’t have jobs. With more than 1,100 stores across southern Africa, it has struggled amid increasing competition, weak consumer spending and stagnant economic growth in its home market. It was taken over by banks and bondholders in 2016 to avoid failing.

Net third-party debt climbed 67 per cent to ZAR 7 billion at the end of June, from ZAR 4.2 billion a year earlier, Edcon says on its website. Sales declined 8.5 per cent in the period.

TAGS : Edcon Holdings Ltd., Public Investment Corp., PIC

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