- Which financial (not tax or labour) short-term compensation schemes for immediate losses due to social distancing measures have been implemented? For which industries/sizes of business?
- Which medium-to long-term stabilisation measures are in place in your jurisdiction?
- Which measures (Guarantees, Loans, Equity Injections, etc.) are available?
- Have these mid- to long-term stabilisation measures already been notified with EU or other antitrust bodies?
- Which prerequisites are necessary to qualify for a programme?
- Are there any major reasons that may inhibit an applicant from successfully applying for a stabilisation measure?
- In an international context, are subsidiaries and branches of foreign parent/holding companies eligible to apply? For EU-States: Also for non-EU-third countries?
- Do your country’s stabilisation schemes foresee restrictions on use of cash/other restrictions?
- How are insolvency application deadlines handled in times of Corona?
- How far have local insolvency/restructuring laws been changed/eased which might have an impact on international businesses?
- Are there any particular Corona-related rules on cross-border insolvencies and restructurings in place in your country?
- Which restructuring/insolvency measures instead of a wind down are available for Corona-related restructurings of entities with an international design or background in your country?
jurisdiction
1. Which financial (not tax or labour) short-term compensation schemes for immediate losses due to social distancing measures have been implemented? For which industries/sizes of business?
President Ramaphosa announced several programmes for small-, medium- and micro-sized enterprises (SMMEs) in various sectors that are impacted financially by the effects of COVID-19, subject to certain qualification criteria which include the temporary employee relief scheme, solidarity fund and other relief programmes.
2. Which medium-to long-term stabilisation measures are in place in your jurisdiction?
The South African Reserve Bank announced an unexpected 100 basis point drop in the repo rate. Additionally, certain commercial banks have offered SMMEs and individual customers in distress payment deferral programmes for up to 6 (six) months. In response to the commercial banks’ initiative, the South African Government has exempted commercial banks from the provisions of the Competition Act, 1998 to enable them to develop common approaches to debt relief and other necessary measures during the COVID-19 crisis. The block exemption covers payment systems and debtor and credit management.
3. Which measures (Guarantees, Loans, Equity Injections, etc.) are available?
Due to fiscal constraints and burgeoning public debt it is unlikely that any such measures by Government will be possible.
4. Have these mid- to long-term stabilisation measures already been notified with EU or other antitrust bodies?
Other.
Comments
N/A
5. Which prerequisites are necessary to qualify for a programme?
SMMEs must meet the following criteria to apply:
- the business must be 100% South African-owned
- at least 70% of employees must be South Africans
- recipients must be tax compliant, and
- depending on the sector in which the SMME is operating, there must be a minimum turnover threshold amount, and the company must meet other additional requirements including:
- having been in business for at least one year
- not have been in distress before the COVID-19 crisis, and
- being fully registered with the Companies and Intellectual Property Commission (CIPC).
6. Are there any major reasons that may inhibit an applicant from successfully applying for a stabilisation measure?
Other.
Comments
An applicant must comply with the applicable qualification criteria in order to qualify for a stabilisation measure.
7. In an international context, are subsidiaries and branches of foreign parent/holding companies eligible to apply? For EU-States: Also for non-EU-third countries?
No.
Comments
In order to qualify for a programme, the company needs to be 100% South African-owned.
8. Do your country’s stabilisation schemes foresee restrictions on use of cash/other restrictions?
Other.
Comments
The stabilisation measures are specifically aimed at providing companies in distress, due to the COVID-19 crisis, with cashflow particularly ensuring that salaries are paid during this period.
9. How are insolvency application deadlines handled in times of Corona?
There is a general prohibition on court procedures with the exception of urgent matters. The insolvency application and other bankruptcy procedures intricately linked require an application to court and therefore will be affected by the temporary restrictions on court applications. CIPC, which forms part of an insolvency application, has closed its offices during the lockdown period and therefore applications have been moved until the lockdown period is over.
10. How far have local insolvency/restructuring laws been changed/eased which might have an impact on international businesses?
No laws have been changed or amended other than a temporary lockdown and restriction on applications which affect insolvency.
11. Are there any particular Corona-related rules on cross-border insolvencies and restructurings in place in your country?
Other.
Comments
N/A
12. Which restructuring/insolvency measures instead of a wind down are available for Corona-related restructurings of entities with an international design or background in your country?
N/A
