Ellies goes into final liquidation

Ellies Holdings has been placed under final liquidation, the company has announced on the JSE News Service.

It emphasised that this only related to Ellies’ listed holding company and not its operating entity, Ellies Electronics.

“Ellies Electronics remains in business rescue, and its business rescue practitioner is continuing to implement the adopted business rescue plan,” the company’s statement said.

This is an interesting statement, considering that SMD Technologies revealed over two weeks ago that it had concluded a deal to acquire the Ellies brand and intellectual property.

The deal is only for the Ellies brand and IP — not the underlying business.

MyBroadband also recently learned that Ellies Electronics’ roughly 140 remaining staff were informed to go home and not return to work that same day.

A well-placed source who spoke on condition of anonymity said all Ellies Electronics staff were offered voluntary retrenchment packages on 5 July, with severance capped at eight weeks’ pay.

This is the minimum applicable for eight years of service.

Staff would not be paid for leave not taken, and those who had served the company for decades would receive the same as someone who joined the company in 2016.

Ellies also only offered voluntary retrenchment when the unions put up a fight. According to our source, the company initially wanted staff to sign mutual separation agreements.

Adding insult to injury, the source said that 2–3 weeks before the voluntary retrenchment notices went out, some staff had received retrenchment packages recognising their full 20+ years of service.

While the severance offers are being called voluntary retrenchment, our source said they were anything but.

“Staff had no choice. They’ve all been coerced and put under duress to sign voluntary retrenchment,” the source said.

“They essentially said, ‘This is the best deal you’re going to be offered. You better take it.'”

SMD Technologies’ acquisition came three months after business rescue practitioner John Evans announced that Ellies Holdings was being liquidated as there was no reasonable prospect of rescuing the business.

That liquidation has now been made final.

Ellies went into voluntary business rescue on 31 January 2024 after a last-ditch deal to acquire alternative energy company Bundu Power fell through.