It’s over for Ellies

 ·10 Apr 2024

Ellies is going into liquidation with no reasonable prospect of the company being rescued.

In January, Ellies announced it was going into voluntary business rescue proceedings in terms of 129(1) of the Companies Act.

This came after the group’s bankers said that they would not fund the proposed transaction where the company would Magetz Electrical Proprietary Limited and Power on Wheels Proprietary Limited (collectively, Bundu Power).

Furthermore, the group failed to publish its interim results in the six months ended 31 October 2023, which were required to be released within three months of the period end.

When the interim results were published, it showed that the group’s revenue dropped by 30.6% to R353 million.

Its loss per share increased by 205% to 13.23 cents, while its headline loss per share increased by 190% to 13.3 cents.

The group said that ‘manageable levels of load shedding’ worked against it.

“The continued and increased load shedding, whilst negatively affecting the economy and which had historically benefitted the group, decreased significantly from May 2023 as Eskom’s planned maintenance was postponed and the use of diesel for Open Cycle Gas Turbines kept load shedding at manageable levels,” it said.

“This resulted in a significant decrease in demand for inverter trolleys and solar products and, together with an oversupply in the market, has negatively affected Ellies’ revenues for the period under review.”

Despite Ellies’ statement, South Africa has experienced a solar boom, with millions imported in 2023.

The group has now said that the business rescue practitioner concluded that there is no reasonable prospect of the company being rescued.

Therefore, in accordance with section 141(2)(a)(ii) of the Companies Act, the group will make an application to the court or an order discontinuing the business rescue proceedings and placing the Company into liquidation.

The group said that further updates will be provided in due course.

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