Most Read Contributor in South Africa, September 2016
The Competition Tribunal (the
"Tribunal") has today heard and approved
an acquisition by Stefanutti Stocks Proprietary Limited (a
subsidiary of Stefanutti Stocks Holdings Limited)
("Stefanutti Stocks") of all the assets
which comprise the business carried out by Energotec, a division of
First Strut (RF) Limited t/a the First Tech Group.
Earlier this year, after failed attempts to procure funding to
continue its business operations, First Strut filed resolutions
placing itself under business rescue. After the business rescue
practitioners resolved that there were no reasonable prospects for
the group to be rescued, they resolved to place the entire First
Strut Group (including Energotec) under provisional
Stefanutti Stocks is a multi-disciplinary construction company
which operates through various business units that provide, amongst
others, building, mechanical, roads, pipelines and mining services.
Energotec is a civil engineering firm primarily operating within
the petrochemical industry.
The Tribunal reached its expedited decision on the basis that
the transaction was unlikely to result in any substantial
prevention or lessening of competition and that the proposed
transaction will have a positive impact on the public interest. In
particular, First Strut is in dire financial distress and currently
under provisional liquidation. As a result of the company's
financial distress, failure to speedily approve the transaction by
the competition authorities would have resulted in job losses for
approximately 667 Energotec employees.
The approval is conditional upon the fact that Stefanutti Stocks
may not retrench more than 16 administrative employees as a
consequence of the transaction. The Commission was of the view that
the saving of jobs outweighed these retrenchments but sought to
confine the negative effects to these 16 employees.
This is the quickest turn-around time in which the Tribunal has
made a decision to approve a merger under public interest
considerations of this nature. The transaction, which comprised a
large merger, was filed with the Commission, which investigated and
referred same to the Tribunal within 3 business days. The Tribunal
scheduled and conducted a hearing approximately 4 hours after
receipt of the Commission's Recommendation. This is thus
reflective of the competition authorities' willingness to go an
extra mile in expediting approval of mergers on public interest
ENS is acting for the liquidators of First Strut and
represented Energotec in this matter.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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