PIC: Edcon rescue plan will help save jobs

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An Edgars store in Johannesburg in March, 2020.
An Edgars store in Johannesburg in March, 2020.
Gallo Images/ER Lombard

The Public Investment Corporation has welcomed the proposed Edcon business rescue plan, saying it hopes that as a major employer, a "lasting solution" can be found for the retailer.

The rescue plan was approved by over 75% of creditors on Monday, after deliberations that lasted into the night.

The PIC, which manages more than R2 trillion in funds, invested in Edcon on behalf of the UIF, as part of a R2.7 billion recapitalisation deal that enabled the company to keep operating. The PIC previously said its investment was based on "sound commercial, social and governance principles".

On Tuesday, the PIC said the proposed Edcon rescue plan "seeks to support job and creditor sustainability and a higher recovery dividend for the Unemployment Insurance Fund (UIF), compared to a liquidation process".

The asset manager said its investment in Edcon was made in line with the UIF's High Social Impact Portfolio mandate, which aims to invest in projects intended to preserve and create jobs.

"Although it is probable that jobs will be lost, support of the Business Rescue Plan aims to minimise job losses, maintain footprint of Edcon’s retail entities to ensure support for landlords and continue to sustain components of the value chain consisting Edcon trading partners.

"PIC is therefore in favour of the plan versus a liquidation process which would have a higher impact on job losses," it said.

Edcon earlier this month served retrenchment notices affecting all 22 000 workers, saying it had not yet received any from people interested in buying the company or any of its divisions.

It had appointed legal counsel to advise on its rights and to vote on its behalf during the rescue process, it added.

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