The business rescue practitioners tasked with the business rescue of Cast Products South Africa have responded with the following statement with regard to questions asked about a memorandum sent to staff on the 20th October 2023:

“We confirm that all CPSA foundries are presently running as normal, and that the closure was a temporary measure that was instituted for a week whilst the business rescue team was resolving internal matters at the company.”

Below is the content of the memo sent out and signed on 20 October 2023 by business rescue practitioner Johan Du Toit.

“As you are all aware CPSA is has been under business rescue from 2022. The company has experienced some difficult times during the year 2023, but the Business Rescue Practitioners and the Executive team are doing all that is possible to ensure business sustainability amidst all the challenges. At the beginning of this year, there was a negative impact due to the low order book as a result of some key client reviewing and cancelling of some significant orders, which affected our operations and cash flow.”

“We are happy to report that there has been a significant improvement in sales and order intakes. As a result of these good order books, we have had to raise funds to ensure a ramp up in production. We have always been supported by our shareholders (IDC in funding and ensuring that the business fulfils its financial obligations including buying materials and paying creditors, and paying salaries amongst others.”

“At this stage, in the month of October 2023, we have a negative cash flow, which makes it difficult to continue to operate. Business Rescue Practitioners (BRPs) are in discussions with IDC to find a suitable solution to provide financial assistance and allow the business to continue normal trading. While these discussions are ongoing, the BRPs and CPSA Management are left with no other option but to temporarily close the business operations until further notice. This will be communicated accordingly as and when the situation improves.”

What does this mean to employees?
“Employees will be expected to stay at home during this period, and the company will legally owe salaries for all the days which employees would have been scheduled to work under the current short-time arrangement. It should be noted that this is a temporary closure of the business, and as soon as the finance becomes available, the business will go back to normal.”