Phumelela’s announcement on Friday that they had appointed the vastly experienced John Evans CA(SA) of RS Advisors, and were succumbing to some form of admission that reality had caught up with them, has been welcomed with a measure of confusion and champagne by most in racing.
The Companies act includes as one of its main objectives to provide for the efficient rescue and recovery of financially distressed companies, in a manner that balances the rights and interests of all relevant stakeholders.
Phumelela has been placed under business rescue proceedings in terms of Chapter 6 of the Companies Act. While it’s foreign territory for most of us, John Evans comes with an impressive CV.
In a paper on the www.accountancysa.org.za website, he writes that Business Rescue can be a useful restructuring tool in the right situation.
‘One of the main benefits is the moratorium that is created by commencement of business rescue, which has the effect of providing breathing room for the company by protecting it from legal action initiated by its creditors for payment.
Another benefit is that the business rescue provisions provide a structured framework for preparing a rescue plan and, most importantly, include a “cram down” mechanism which binds all creditors to the adopted business rescue plan, whether they voted in favour or against the plan’.
He continues that it is essential that open communication takes place with all key stakeholders, regardless of the reasons for the distress or whether the restructuring is achieved informally or formally.
Every restructuring process has a very personal impact on the employees, customers, suppliers, lenders and shareholders of that business.
As such, it is important to develop a communication strategy and plan to secure and maintain the support of all stakeholders throughout the process.
A Chartered Accountant with 18 years turnaround, distressed business advisory and Corporate Finance experience, he began his career in Australia with specialist turnaround management business Jirsch Sutherland.
During this period Evans qualified as a Chartered Accountant and initially assisted with and later managed over 40 Voluntary Administrations, a restructuring process very similar to business rescue in South Africa.
In 2001 he joined Deloitte Reorganisation Services in Edinburgh before transferring to Deloitte South Africa in 2002 where, together with Philip Reynolds began developing a Reorganisation services business focussed on turnaround and distressed business advisory for the South African firm.
During his time at Deloitte, he was appointed as Director Corporate Finance to run the existing Corporate Finance team in Pretoria whilst continuing to develop the Reorganisation services division. In 2008 John founded RS Advisors which provides both Corporate Finance Advisory and advisory services to clients in the distressed debt sector.
In addition to the sub Saharan work, he has assisted the Deloitte Reorganisation Services team in London on a number of restructuring assignments in Europe, USA and the Middle East.
Evans passed the Law Society programme “Advanced Short Course in Business Rescue Practice” with distinction and is certified as a senior business rescue practitioner in South Africa.
He has handled a number of big corporate names to date. This will be his most important assignment for all of us in racing.
