Electronics group Ellies has filed for business rescue after its efforts to branch out into the potentially lucrative renewable energy market fell by the wayside.
Ellies failed to secure backing from its lenders, rendering a proposal to acquire Bundu Power for R203m null and void.
The proposed acquisition, first announced a year ago, was subject to debt funding by bankers, as well as its shareholders.
“Our bankers have advised that they will not fund the proposed transaction and thus the company advises that the conditions precedent will not be met, and therefore the agreement in this regard will lapse and be of no further force or effect,” the company said in a statement on Wednesday.
Ellies was pinning its hopes on Bundu Power, which specialises in distributing and leasing generators along with the distribution and installation of solar and related products for residential, commercial, industrial, hospitality, agricultural and recreational users.
The company has been struggling for the better of the past decade, as reflected by the decimation in its stock price. Its shares hovered at just 2c in early trade on the JSE, down from highs of R9 in 2013.
The company imports and manufactures an assortment of consumer products.
Ellies also announced a delay in publishing its results for the six months ended October.
Business rescue helps to protect distressed companies against their creditors and is seen as viable mechanism rehabilitate the company.
BusinessLIVE
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