R1-billion electronics factory opts for business rescue to dodge liquidation

The process to liquidate Yekani Manufacturing was suspended in court on Tuesday, pending a hearing on its business rescue application.

In January it was revealed that the East London electronics factory was in deep financial trouble. Workers at the facility had not been paid in five months and operations did not resume at the start of the year.

The company reportedly owes Standard Bank millions after falling behind on loan repayments. The bank has initiated a liquidation process which was heard in court yesterday.

Attempt to save 500 jobs

Yekani said yesterday’s ruling could help in its bid to save jobs at the defunct factory.

“Today’s outcome allows Yekani to re-affirm its commitment of protecting and saving the jobs of its 500 skilled workers,” the company stated.

The company said it takes full responsibility for its current state and thanked a number of governmental institutions for their efforts in attempting to save Yekani and the jobs of its employees.

Standard Bank is opposing Yekani’s application for business rescue.

A report from the Daily Dispatch said that Standard Bank was calling back an amount of R88 million in unpaid debt.

Yekani’s CEO Siphiwe Cele previously said that it owed the bank no more than R60 million.

The court date for the business rescue application will be confirmed in due course, Yekani said.

Now read: How South Africa’s tech industry can create 500,000 jobs in 10 years

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R1-billion electronics factory opts for business rescue to dodge liquidation