BUILDING: R4m national flooring deal underlines potential of successful business rescue legislation
Recent Western Cape Business News
Corporate-911, the Johannesburg-based business rescue firm, has successfully facilitated the acquisition of Floors Direct Investments (Pty) (FDI) by Tiletoria (Western Cape) (Pty).
This follows months of negotiations and a Corporate-911 due diligence exercise indicating that Floors Direct was a business that could be rescued.
Tiletoria, having recognised FDI’s potential, paid R4m for the business, effective in April at the end of the due diligence period.
“We are encouraged by the success of the Floors Direct business rescue process, as it establishes an indicative future precedent,” says Corporate-911director Robin Nicholson.
“The advent of the new Companies Act has resulted in a comprehensive revision of corporate governance and corporate finance in South Africa, a significant feature of which was the introduction of business rescue. This Tiletoria acquisition is an example of the benefits that can be reaped through successful business rescue procedures.
“The acquisition of nine Floor Direct stores in Gauteng will help build Tiletoria into a powerful force in the Gauteng flooring market, building on its strengths in the Western Cape and KwaZulu-Natal and consolidating its operations in Gauteng.”
Tiletoria will provide a significant amount of trade working capital to the Group over the next few months, including new leases, equipment and premises. Tiletoria management has confirmed that job losses have been kept to a minimum.
The stores will continue to trade under the well-known Floors Direct banner.
“This new alignment of the business will enable Floors Direct to position the company as the foremost provider of flooring solutions in wood, laminate, engineered wood, and Bamboo and vinyl floors,” says Nicholson.
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