Autozone on the ropes over lending stalemate
AutoZone has published a business rescue plan which the retailer hopes will help secure its future following a tumultuous four years.
The firm, which claims to be SA’s biggest privately owned parts retailer, went into business rescue in early July after reaching a stalemate with its main credit provider, Absa.
IoL reports that the plan proposes a number of structural changes aimed at ensuring a successful rescue process. That includes the proposed closure of nine AutoZone branches, which are currently deemed unprofitable, and this is set to affect 46 employees.
The retailer currently has 214 wholly-owned branches and 33 member-owned branches throughout Southern Africa.
In line with section 151(1) of the Companies Act, AutoZone will hold a meeting with all affected creditors and other holders of a voting interest tomorrow.
The Motor Industry Staff Association said it would continue to participate in the process in order to protect the interests of its members who are affected by the proposed layoffs.
AutoZone has struggled with debt repayments for a lengthy period of time, with the Covid-19 pandemic having hit the retailer particularly hard.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
