The Motor Industry Staff Association (Misa) has assigned its legal department to engage with business rescue practitioners (BRPs) of AutoZone Holdings as it ensures the protection of its 317 members, and their continued payment.
This comes after the high court last week granted an order for Absa to seize AutoZone’s movable assets over its over R300 million debt burden.
AutoZone owes Absa R302m which accumulated during a series of financial agreements and defaults.
Misa said yesterday though AutoZone did not inform it prior to filing its notice beginning business rescue proceedings, it was on high alert and would participate in the process to protect the interest of its members and keep them informed of any developments.
Martlé Keyter, Misa’s operations CEO, said the union was fully aware of the dire ongoing slump in the retail motor industry due to the 15-year record-high interest rates and rapid increase in the cost of living.
“Misa appreciates AutoZone taking the initiative to protect and secure the business to avoid job losses,” Keyter said, assuring that in accordance with the business rescue proceedings outlined in the Companies Act, Misa’s members will continue to receive their salaries and any other payments they are entitled to.
“One of the union’s senior labour advisers has been assigned to engage with the business rescue practitioners. Misa is positive that no stone will be left unturned to attract potential investors. AutoZone is an established brand name.”
The Johannesburg High Court granted Absa an order to seize control of the assets of automotive parts retailer AutoZone due to the company’s inability to settle its outstanding debts, allowing Absa to claim AutoZone’s movable assets under its general notarial bond.
This means the bank can take and keep these assets as security.
But in response to enquiries, Absa’s manager for external communications Naleni Pebane would not commit to saying if it would enact the court order and attach the assets.
“Absa is working with the business rescue practitioners in order to achieve a favourable outcome for the relevant stakeholders in this matter,” Pebane said.
“Given the current process and the required confidentiality considerations, we are unable to comment further on this matter.”
In a meeting with creditors this month, the designated BRPs Piers Marsden and Jenna Osborne of Matuson and Associates, said in their view, there was a reasonable prospect of rescuing AutoZone.
However, they said this depended on the availability of funding, the underlying quality of the business after they completed their assessment, and the potential for investment in or the outright acquisition of the business.
Marsden and Osborne have begun discussions with several parties that have expressed an interest in acquiring AutoZone, and alluded to the possibility that the company may be sold and the proceeds from the sale used to cover its debts.
“We believe that the business rescue process will provide a reasonable prospect in achieving a better outcome for all stakeholders than an immediate liquidation,” they said.
BUSINESS REPORT