Park Village Auctions’ Director, Roy Lazarus, offers insight into his three major predictions of what the auction industry can expect following the country’s national Covid-19 prevention lockdown.
Lazarus: “The national lockdown has forced many companies to transition to digital operations. Some taking online backorders and queueing delivery until ‘normal’ business resumes, others pivoting their entire business model to online.
“Auctions have followed suit (as far as possible). Thanks to the rise of eCommerce, consumers are already accustomed to purchasing big-ticket items such as cars online.
“I foresee online attendance of our monthly vehicle auctions increasing considerably.”
Park Village Auctions’ monthly vehicle auctions see genuine bank repossessed passenger and light commercial on the block.
Increased Demand in Asset Disposal
A direct result of the lockdown will be a surge in asset disposal says Lazarus: “Companies will either embrace the fourth industrial revolution and thus no longer need large office space the superfluous furniture. Or, they will sell off assets to recoup liquid capital.”
According to Lazarus, auctions represent an ideal mechanism to realise assets. “The sale is immediate, there is no haggling, and payment is due on the fall of the hammer.” Says Lazarus.
Business Rescue and Liquidation Matters
The predictions take a sombre turn. Lazarus: “As a nation, are all acutely aware of the last outcome of the lockdown. That is a dramatic increase in businesses filing for business rescue and even liquidation.”
PVA has been entrusted as official auctioneers on some of the most significant business rescue and liquidation matters in South Africa namely, the successful sales of the BOSASA assets, Koornfontein Mine, and properties in the Maboneng Precinct.
“The nature of auctions—having a fast sales and payment turnaround—make them favourable among business rescue practitioners and liquidators. Matters such as these are never easy to face. Shareholders usually find consolation in the swift resolution that auctions offer.” Notes Lazarus
PVA’s business rescue division specialises in selling businesses experiencing difficulties, most of which simply require a capital injection or restructuring to continue operating and therefore represent an excellent opportunity for investors.
Commenting on South Africa’s resilience amid crisis, Lazarus commends SA business on their adoption of remote work, “no longer relying on our offices”, he concludes.