Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)

Abstract

Evaluating Sources and Forms of Post-Commencement Business Rescue Finance in Kwazulu-Natal, South Africa...

Author(s): Kajal Ramnanun, Surendran Pillay, Rajendra Rajaram

The purpose of this study was to ascertain the sources and forms of post-commencement finance (PCF) available for distressed companies in KwaZulu-Natal (KZN), South Africa (SA). PCF is finance approved for a company in business rescue, which is regulated by section 135 of the South African Companies Act. There has been prior research done on the impact of post-commencement finance but not on the forms and sources of finance for business rescue in KZN. Insights of business rescue practitioners were obtained in KZN to address challenges of forms and sources of PCF available. The study utilised a qualitative research design to explore the sources of funding and forms of PCF. The findings confirm that PCF hasn’t been widely utilised for business rescue and respondents concurred there are barriers and challenges in obtaining finance for distressed companies in KwaZulu-Natal. The implication of these results is that firms have limited sources of finance for PCF in KZN and although development financiers are perceived as appropriate funders, procedures are cumbersome and inflexible. This study contributes to the available sources and forms of PCF for companies in distress in KZN.

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