Retail Therapy - Financial Restructuring of Edcon
A&O advises on ZAR19.7 billion ($1.5 billion) financial restructuring of one of South Africa’s largest retailers.
A&O advised the term loan lenders on the ZAR19.7 billion ($1.5 billion) financial restructuring of indebtedness owed by Edcon Holdings Limited and its subsidiaries. Edcon is one of the largest clothing, footwear and textiles retailing groups in southern Africa and trades through a range of retail formats. The deal was the first major leveraged buyout restructuring to make use of South African compromise proceedings and the largest successful restructuring in South Africa.
The restructuring delivered a more sustainable and simplified capital structure and a significantly deleveraged operating group, while respecting the priorities among the creditors in the pre-existing and multi-levelled capital structure. Multiple regulatory approvals were required to implement the restructuring, including from the South African Competition Commission, the Financial Surveillance Department of the South African Reserve Bank and the South African Revenue Service.
“Highly complex and challenging”
Lional Shawe (Partner, Johannesburg Restructuring) commented: “The Edcon restructuring transaction was a highly complex and challenging restructuring due to the complicated pre-existing financing structure and the number of parties involved with differing financial interests. A&O was able to leverage off the experience and expertise of lawyers across a number of offices and disciplines to assist in achieving a successful restructuring.”