Commission approves Edcon rescue deal
The Competition Commission’s approval of clothing retailer Edcon’s restructuring has cleared a major hurdle in its R2.7bn refinancing, says a Business Day report.
Edcon – which operates the Edgars, Jet and CNA chains – struck a deal with its creditors in March, including its landlords and banks, which resulted in them providing financing and becoming shareholders in the retailer.
The proposed ownership change subsequently led to the creation of New HoldCo to house its new shareholders. On Tuesday, the commission recommended that the Competition Tribunal approve New HoldCo’s takeover of Edcon.
The commission found that the proposed transaction ‘was unlikely to result in a substantial prevention or lessening of competition in the relevant markets.’
It also noted that the transaction sought ‘to mitigate the dire financial position the Edcon Group finds itself in and avoids potential liquidation, which may result in job losses’.
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