Ellies Electronics – the main operating subsidiary of Ellies Holdings – has received buyout offers from unnamed third parties that its CEO believes could save the company.
This latest plot twist in the long-running Ellies saga came after Ellies Holdings said on Wednesday that it would apply for liquidation in terms of the Companies Act after failing to secure backing from its bankers for an acquisition that formed a key part of a turnaround plan.
The company was placed into voluntary business rescue in January when a planned acquisition of Bundu Power, which it had hoped would put it on a firmer footing financially, fell through.
That deal was subject to debt funding from Ellies’ bankers and the approval of shareholders. The bankers advised Ellies that they were not prepared to fund the acquisition.
“The business rescue practitioner has concluded that there is no reasonable prospect of the company being rescued, and therefore … application will be made to the court for an order discontinuing the business rescue proceedings and placing the company into liquidation,” Ellies Holdings said in a brief statement on the JSE’s stock exchange news service (Sens) late on Wednesday.
But in the latest development, Ellies Electronics – which “contains all cash-generating business units within the Ellies Group” – said it intends to continue trading.
“We would like to clarify that the recent Sens announcement related to Ellies Holdings. Ellies Holdings is the JSE-listed holding company of the Ellies group of operating entities. Its only assets are shares in its operating subsidiary companies,” said John Evans, business rescue practitioner for both Ellies Holdings and Ellies Electronics. “Ellies Electronics continues to trade and is on track to publish a proposed business rescue plan by 10 May 2024.”
Third parties
Shaun Prithivirajh, CEO of Ellies Electronics, said in the statement: “The retail distribution business will continue to supply its customers, the trade counters will remain open for business, the commercial projects division will continue to install and commission projects that are underway, and the satellite installations and solar power divisions will continue to install systems for its customers.
“The business rescue practitioner has received offers from third parties who wish to acquire the operating divisions and is hopeful that the sale of these viable operations will be concluded in the coming weeks. This not only ensures continuation of business relationships, but also provides the opportunity for a significant number of employees to be transferred to the potential acquirers,” Prithivirajh said, without naming the third parties.
Read: Remembering Ellie Salkow, a pioneer in SA broadcasting
Ellies Electronics was founded in 1979 by the late Elliot (“Ellie”) Salkow, who passed away in 2021. – © 2024 NewsCentral Media
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