Companies Act, 2008 (Act No. 71 of 2008)Chapter 6 : Business Rescue and Compromise with CreditorsPart D : Development and approval of business rescue plan150. Proposal of business rescue plan |
| (1) | The practitioner, after consulting the creditors, other affected persons, and the management of the company, must prepare a business rescue plan for consideration and possible adoption at a meeting held in terms of section 151. |
| (2) | The business rescue plan must contain all the information reasonably required to facilitate affected persons in deciding whether or not to accept or reject the plan, and must be divided into three Parts, as follows: |
| (a) | Part A—Background, which must include at least— |
| (i) | a complete list of all the material assets of the company, as well as an indication as to which assets were held as security by creditors when the business rescue proceedings began; |
| (ii) | a complete list of the creditors of the company when the business rescue proceedings began, as well as an indication as to which creditors would qualify as secured, statutory preferent and concurrent in terms of the laws of insolvency, and an indication of which of the creditors have proved their claims; |
| (iii) | the probable dividend that would be received by creditors, in their specific classes, if the company were to be placed in liquidation; |
| (iv) | a complete list of the holders of the company’s issued securities; |
| (v) | a copy of the written agreement concerning the practitioner’s remuneration; and |
| (vi) | a statement whether the business rescue plan includes a proposal made informally by a creditor of the company. |
| (b) | Part B—Proposals, which must include at least— |
| (i) | the nature and duration of any moratorium for which the business rescue plan makes provision; |
| (ii) | the extent to which the company is to be released from the payment of its debts, and the extent to which any debt is proposed to be converted to equity in the company, or another company; |
| (iii) | the ongoing role of the company, and the treatment of any existing agreements; |
| (iv) | the property of the company that is to be available to pay creditors’ claims in terms of the business rescue plan; |
| (v) | the order of preference in which the proceeds of property will be applied to pay creditors if the business rescue plan is adopted; |
| (vi) | the benefits of adopting the business rescue plan as opposed to the benefits that would be received by creditors if the company were to be placed in liquidation; and |
| (vii) | the effect that the business rescue plan will have on the holders of each class of the company’s issued securities. |
| (c) | Part C—Assumptions and conditions, which must include at least— |
| (i) | a statement of the conditions that must be satisfied, if any, for the business rescue plan to— |
| (aa) | come into operation; and |
| (bb) | be fully implemented; |
| (ii) | the effect, if any, that the business rescue plan contemplates on the number of employees, and their terms and conditions of employment; |
| (iii) | the circumstances in which the business rescue plan will end; and |
| (iv) | a projected— |
| (aa) | balance sheet for the company; and |
| (bb) | statement of income and expenses for the ensuing three years, prepared on the assumption that the proposed business plan is adopted. |
| (3) | The projected balance sheet and statement required by subsection (2)(c)(iv)— |
| (a) | must include a notice of any material assumptions on which the projections are based; and |
| (b) | may include alternative projections based on varying assumptions and contingencies. |
| (4) | A proposed business rescue plan must conclude with a certificate by the practitioner stating that any— |
| (a) | actual information provided appears to be accurate, complete, and up to date; and |
| (b) | projections provided are estimates made in good faith on the basis of factual information and assumptions as set out in the statement. |
| (5) | The business rescue plan must be published by the company within 25 business days after the date on which the practitioner was appointed, or such longer time as may be allowed by— |
| (a) | the court, on application by the company; or |
| (b) | the holders of a majority of the creditors’ voting interests. |