Legal protection, combined with committed employees, as well as efficient business rescue practitioners (BRPs) and business processes, are pivotal to engendering a successful business rescue process. 

This has been evidenced by the ongoing successful business rescue process of three companies from the Dickinson Group of Companies. 

The Dickinson Group of Companies has existed since 1910 – when it was initially known as J.H. Dickinson Construction –  and the fourth generation of the Dickinson family is still involved in the businesses. It comprises a diverse range of enterprises operating across various industries and global regions. 

The Dickinson Group of Companies has been a prominent player in the South African industry for more than 110 years, and having been through the proper business rescue process for 18 months, using the services of the Business Rescue Partner company, will be an even stronger and more efficient provider of industrial services to the international industry once the process is fully completed. 

This was highlighted by Dickinson Group of Companies CEO Jaco Stapelberg, and BRPs Stefan Steyn and Tim Stokes. 

During December 2021, issues with a large project at a South African mine forced one of the major group companies, Dickinson Furnace Services, into a cash flow crisis and the company was placed into voluntary business rescue

Simultaneously, two of the group’s smaller companies, Dickinson Plant and Dickinson Holdings Trading, were also put in voluntary business rescue as they were interlinked to Dickinson Furnace Services. 

While the final business rescue plan was adopted only in October 2023, the company has been paying back creditors monthly since October 2022. 

The company has also been operating on a prepaid basis since the business rescue process began and, therefore, has not accumulated many creditors. 

Moreover, the majority of all the securities held on the assets of the company could be cancelled and new financing options are now possible, if needed. 

Dickinson Furnace Services has also made stable profits during the business rescue period, with Stapelberg proudly stating that the outlook for 2024 is “very positive”. 

Should the company continue to win tenders for projects, a bright future is anticipated. 

Business Rescue Process 

The BRPs were expeditious in their engaging with company management after the formal business rescue process had begun. 

All employees were involved in contributing to proposals that could lead to cost savings. Various restructuring, and new procedures and performance management tools, were also implemented swiftly. 

A proposed business rescue plan was published soon thereafter, followed by various engagements with creditors where the plan was revised to consider new proposals from all affected parties. 

Over the business rescue period, various legal issues with individual creditors were resolved in a fair and amicable way, Steyn and Stokes say. 

The business rescue process for Dickinson Plant and Dickinson Holdings Trading has concluded, and the last payments to creditors were completed in October 2023. 

The final business rescue plan for Dickinson Furnace Services was voted in on October 16. The company can now be taken out of formal business rescue, which would enable it to operate as a normal business. 

The Importance of Proper BRPs 

Steyn and Stokes emphasise that it is critical to select a dedicated and committed BRP, adding that, should it become apparent that the practitioner is not fully devoted to the company’s success, it is imperative to either insist on their full engagement or explore the possibility of replacement. 

They aver that the detailed analyses of the company during the period in business rescue must be used to improve in all aspects of the business, and it is important to ensure that all such improvements are embedded in the future management of the company. 

The selected BRP must have a solid record of success in helping companies through business rescue; must be involved in the day-to-day management changes in the company to improve the future performance of the company; and must have a team of legal and information technology experts available to support the change processes. 

Steyn and Stokes add that the BRP has to implement various performance management tools so that the majority of the company’s activities can be measured on a daily and/or monthly basis, with these tools also visible to all employees. 

Restructuring balance sheet items is very important, and an outside, independent person with experience can considerably improve the financial position of a company in this regard. 

Steyn and Stokes stress that the BRP must also help to ensure that the relationships with the creditors are maintained so that the company can rely on continued support and supply from them. 

Other Critical Elements 

The support from creditors, keeping employees motivated, identifying opportunities for change in the current processes and structures, and measuring all key performance areas in a diligent and visible way, are also important for a successful business rescue process, Stapelberg avers. 

The legal protection granted by the business rescue process is important, as this mitigates against  creditors before the business rescue initiating legal action, which could push the company into immediate liquidation, without the option of protecting the jobs of employees, Stapelberg emphasises. 

It also enables a company to continue with business and pay creditors a much higher portion of the debt over a period than the creditors would have received from immediate liquidation. 

Mitigating Challenges 

The business rescue process, was, however, not without challenges. 

Stapelberg says the main hurdle was ensuring that the employees and the entrenched culture could adapt to the new ways of doing business. This was attained through the full buy-in from management and detailed, regular communication with employees. 

Although legal issues with some of the creditors were onerous and expensive, they were necessary to ensure fair outcomes in some disputes that had to be resolved.

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