Barloworld May Lose Cash in Collapse of African Bank’s Ellerine
Nov. 5 (Bloomberg) — Barloworld Ltd., a South African distributor of Caterpillar Inc.’s construction machinery, may lose as much as $9.8 million in the closing of an African Bank Investment Ltd. furniture unit, an administrator’s report shows.
Ellerine Holdings Ltd., controlled by the failed bank, has a debt to Barloworld of as much as 109.7 million rand, according to the report. Barloworld is owed some money by Ellerine, a spokesman for the Johannesburg-based machinery distributor said by phone today, without giving details. The company is monitoring the business recovery process, he said, asking not to be identified in line with corporate policy.
Ellerine may close by the end of January after a rescue process to sell all its store brands and raise capital fell short, according to the report by Ellerine’s administrators. If the Johannesburg-based company were to be closed now, creditors may receive between nothing and 13 South African cents for every rand owed, according to the report. Under the business-rescue plan they may get as much as 30 cents.
Ellerine’s so-called concurrent creditors, who don’t have preference ahead of other creditors, are potentially owed almost 2 billion rand, according to the report, posted on the company’s website Nov. 1. FirstRand Ltd., Africa’s biggest banking group by assets, stands to lose as much as 313 million rand.
“FirstRand Bank has exposure to Ellerine Holdings and Ellerine Furnishers through its corporate bank and Wesbank divisions,” Sam Moss, a spokeswoman, said in an e-mailed response to questions today. “The facilities are secured by assets financed and intergroup guarantees. The bank is in discussions with Ellerine Holdings’ business rescue practitioners with regards to the plan.”
Flowers, Skincare
Standard Bank Group Ltd. is owed 150 million rand, while Barclays Plc’s South African unit and Investec Plc are each due 100 million rand, according to the report.
Other creditors include American Express Co. at 476,024 rand, the bath and body care company Crabtree & Evelyn Ltd. at 42,500 rand, film distributor Ster-Kinekor Home Entertainment (Pty) Ltd. at 47,907 rand, and the Flower Boy at 345,220 rand.
African Bank collapsed in August after losses mounted and funding dried up. The central bank stepped in to arrange a rescue and Ellerine appointed administrators to try save the business after African Bank cut funding to the retail group.
Ellerine creditors are due to meet in Johannesburg on Nov. 10 to discuss the business-rescue plan.
To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net John Viljoen, Steve Bailey
