AUTOFORUM

Chemspec Closes Leaving 400 Without Work

Aug 25, 2015 paint, Chemspec, Aftermarket, bodyshop

Chemspec earlier this month closed its doors after a high court application for its liquidation saw more than 400 people across the country lose their jobs. The winding-up application in the Durban High Court was predicted after one of its financial bankers called in a R74 million loan given to keep the 58-year-old business going while under business rescue management. But what appeared to be a good offer – one which would guarantee jobs and the company’s continued presence in South Africa – was dashed at the last minute.

And its former chief executive Strath Wood – who left South Africa under a cloud of debt and whose estate is under threat of repossession – could have put the final nail in the coffin through his involvement in entities which own the property where the company is based. According to an affidavit filed with the court, the offer from an international investor to buy the business as a going concern for R175 was conditional on being able to lease the property where the company operated from.

Strath Wood and his family trust have interests in the company that owns the property and he sits as a director on its board. The affidavit also states that despite several attempts by the potential buyer to mediate an acceptable compromise regarding the lease, the parties were unable to reach an agreement.

Yesterday the company posted a circular to creditors regarding the liquidation (http://www.chemspec.co.za/docs/financial/business_rescue/termination/First%20Circular%20to%20Creditors.PDF)

Attempts to reach the company for comment have been unsuccessful.

Read the original story here: (http://www.bodyshopnews.net/index.php/component/k2/item/1095-end-of-the-road-for-chemspec )