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Why Auctions are a Preferred Mechanism in Business Rescue Matters

As the words “In Business Rescue” frequent more and more auction adverts, Park Village Auctions Head Auctioneer, Clive Lazarus shares insight as to why Business Rescue Practitioners (BRPs) choose auctions as their preferred method for asset disposal or selling the business as a going concern.

Business Rescue refers to the proceedings to facilitate a financially distressed company’s rehabilitation. “As the name implies, the aim is to save the business from closing,” Lazarus explains. He continues, “The process typically entails restructuring of assets, equity, debts, properties or liabilities so that the concern can meet its financial obligations and continue operations.”

Lazarus says that most businesses that are experiencing difficulties simply require a capital injection or restructuring to continue operating, and therefore represent an excellent opportunity for investors.

“Time, however, is of the essence. Problems worsen the longer a business tries to operate in financial distress. Most businesses wait too long before filing for business rescue, lowering their chance of resuscitation.”

According to Lazarus, herein lies the reasons the BRPs favour auctions for turning unused or redundant stock, properties and other assets into liquid cash without lengthy haggling over price.

Says Lazarus: “Auctions gather willing, qualified buyers at once and drastically reduced sale and payment turn-around time.

“It’s not just about getting whoever is available in a room. We have specialised sales methods beyond conventional public auctions, such as closed; timed or webcast auctions and invitations to submit offers, which can achieve specific strategic goals. “

“The nature and formality of inviting offers, for example, attract a distinct type of targeted, serious buyer. Here, the buyer puts their intent to purchase upfront in writing. On the other hand, online auctions increase the auctioneers reach significantly, making for fiercer bidding to achieve the best prices possible. It depends on your objectives.

“Strategic marketing and a comprehensive, clean, maintained, and a well-segmented database goes hand-in-hand with the optimum sales vehicle. In principle, the benefits of all auction types remain:

  • There are no suspensive conditions. Buyers know that what they are bidding on is sold voetstoots, and the terms and conditions are read out aloud before the auction begins.
  • The buyers are liable for commission and other applicable auction fees.
  • The seller can be kept private, where sensitivities are likely to be encountered.”

Commenting on why BRPs most often appoint PVA for auctions of this nature, Lazarus says, “PVA has specialised in assisting Business Rescue Practitioners for several years. We have earned a reputation for transparent dealings (crucial in such matters) and realising the highest possible rates for our clients. Our experience in disposing of a broad range of assets from immovable property—including mining plants—agricultural equipment to antiques, any manner of vehicle and even aircraft gives BPRs reassurance that we can handle any matter smoothly and professionally.”


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