Ellerine rescue going 'better than expected'

Johannesburg - The business rescue plan for the furniture arm of failed South African lender African Bank is progressing better than expected and has realised a better cash position than had been earlier hoped, administrators said in a report. The retailer, with debts adding up to around R1.3 billion and was forced into business rescue last year, which allows for temporary protection from creditors, as parent African Bank Investments crumbled under bad debts. "We are currently outperforming the forecast, in winding down the South African operation, resulting in a better cash position than was originally anticipated in the plan," Matuson Associates said in their latest report to creditors. Ellerine said it expected a binding offer for the retailer's 80 stores outside South Africa in March. An unnamed buyer has made an indicative offer to take up the shops for R400 million. Ellerine, which had store brands such as Beares and Furniture City, has already let go of nearly 4 700 employees. Some of its leases have been taken up by retailers Shoprite and Pick n Pay. In December retailer Shoprite said it is buying upscale Wetherlys furniture stores from Ellerine. Ellerine has received a R400 million indicative offer for its nearly 80 stores outside South Africa and has the competition watchdog's preliminary approval to sell 63 stores of its Beares brand to Lewis Group for up to R90 million. The Competition Commission has also given a nod to the acquisition of Dial-a-Bed by Coricraft. Other Ellerine brands include Ellerines stores, Furniture City and Geen & Richards. - Fin24