Turnaround Industry South Africa

Jan van der Walt (Director: Certification) March 2010 The Turnaround Industry in South Africa and the Need for Certification Industry Structure, Driving Forces and Constraints The premier professional community dedicated to corporate renewal and turnaround management

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The Turnaround Industry in South Africa: ,[object Object],[object Object],[object Object],[object Object]

Developments in the SA turnaround industry cover a number of areas Underperforming & distressed businesses and government structures Industry constraints The market for turnaround TURNAROUND INDUSTRY STRUCTURE Industry participants SA Turnaround Industry Industry driving forces

The turnaround industry consists of turnaround professionals of various disciplines Under-performing & distressed businesses and government structures Stakeholders: Industry participants formed TMA - Southern Africa in 2005. TURNAROUND INDUSTRY STRUCTURE Management Organisational Stakeholders Employees Shareholders Capital Market Stakeholders Banks Unions Suppliers Customers Government Host communities Product/Market Stakeholders Industry Association Turnaround Management Association – Southern Africa Industry Participants Lenders - Banks, Development Fund Institutions (IDC, DBSA) Financiers Investors - institutional investors, DFIs, private equity, venture capital Turnaround practitioners Service providers Turnaround consultants Accountants Attorneys Legislators Government SARS Legislation Faculty/Academic Research Financial advisors dti

Government has gazetted new business rescue legislation to save jobs, and industry organised itself ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],DRIVING FORCES - POLITICAL

Government has gazetted new business rescue legislation to save jobs, and industry organised itself - 2 ,[object Object],[object Object],[object Object],DRIVING FORCES - POLITICAL

South Africa has to fight poor business results as a result of the recession ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],DRIVING FORCES - ECONOMIC The need for turnaround is great!

Business confidence is decreasing (1) DRIVING FORCES - ECONOMIC

Business confidence is decreasing (2) DRIVING FORCES - ECONOMIC

Interest rates increased to curb inflation, but recently decreased to stimulate the economy DRIVING FORCES - ECONOMIC 5% -4,5%

Monthly and annual liquidations, however, are on the rise DRIVING FORCES - ECONOMIC

Job preservation is an important objective of new business rescue legislation ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],DRIVING FORCES - SOCIAL Unemployment is set to rise as a result of the global economic slowdown.

The turnaround industry’s education efforts are young – 5 years old ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],DRIVING FORCES - TECHNOLOGICAL The turnaround industry is in dire need of education and training!

New business rescue legislation is expected to become the most important future driving force of the industry ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],DRIVING FORCES - LEGAL

New business rescue legislation is expected to become the most important future driving force of the industry ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],DRIVING FORCES - LEGAL

Business Rescue Process and Resolution:

A business rescue practitioner is a Chapter 6 turnaround practitioner operating in term of the Companies Act For underperforming and distressed businesses, planning and implementation of: This means that a Business Rescue Practitioner should preferably have top management and director experience. DRIVING FORCES - LEGAL Turnaround Practitioner ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Chapter 6 Turnaround Practitioner (Business Rescue Practitioner) ,[object Object],[object Object],[object Object],[object Object]

There are further requirements to be appointed as a business rescue practitioner ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],DRIVING FORCES - LEGAL The Certification Governance Board will apply to the Minister to be recognised as the regulatory authority of business rescue practitioners.

The Need for Turnaround and Certification of Turnaround Professionals: ,[object Object],[object Object],[object Object],[object Object]

The industry is hampered by lack of education, experience and certification ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],CONSTRAINTS The turnaround industry is in dire need of education and training!

Lack of finance represents a major constraints to growing the turnaround industry ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],CONSTRAINTS Lack of turnaround private equity funding will effect Chapter 6 adversely.

Lastly, compared to overseas, the industry suffers from a number of legal constraints ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],CONSTRAINTS

There is a dire need for qualified turnaround professionals ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],THE NEED FOR CERTICATION

Questions? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Turnaround Management Association – Southern Africa Director Certification: Jan van der Walt

Turnaround Industry South Africa

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