Attorney confirms that according to their knowledge the buyer has the intention to continue operating the business as West Pack Lifestyle.
West Pack Lifestyle will be exiting business rescue after less than six months as a private sale has been concluded.
The business voluntarily entered business rescue on 15 May, saying the accelerated growth path for the past four years had placed a strain on the group’s cash flow.
The group owed more than R100 million to different financial institutions such as Access Bank, Absa, and Preference Capital.
Private buyer comes to the rescue
Fluxmans Attorneys director Craig Blumenthal confirmed to The Citizen that the bid was accepted on 8 October 2024 after the plans were adopted. While the deal is in the process of being concluded.
When asked how much is the deal, he said the information cannot be made public.
“The deal is subject to strict confidentiality agreements and as such very limited information outside of what has already been made public can be shared.”
Blumenthal did confirm that according to the company’s knowledge the buyer has the intention to continue operating the business as West Pack Lifestyle.
ALSO READ: Will Cross Trainer parent company be liquidated?
Private buyer saves jobs
The private sale of West Pack Lifestyle will see more than 1,000 jobs being saved, and keeping doors opened to at least 30 corporate stores and 40 franchise stores.
West Pack’s CEO, Jose da Silva said the working constraints during 2023 resulted in the group facing several challenges, including difficulty in acquiring the correct stock and appreciating product mix.
“Due to the country’s economy, load shedding, and changed consumer habits, the company’s turnover has steadily declined over the past number of months. Not being able to achieve its budgeted turnover, and trading at a loss,” he added.
ALSO READ: SABC technically insolvent, uncertain if it will meet financial obligations
Why business rescue
He said he voluntarily entered the business into business rescue because he believed the company’s turnaround would improve.
This was either through the exploration of various offers to acquire either the assets or the business of the group; improved procurement procedures and achieving optimal stock levels and product mix; reduction of overhead expenses and restructuring.
According to applications by financial institutions, Absa granted the company financial support of R40.4 million and R38.3 million.
While Access Bank granted West Pack Lifestyle an overdraft worth R50 million.
NOW READ: Explainer: How business rescue works
