In mid-December, SA's largest clothing retailer launched a compromise sanction process for the proposed restructuring of the group.
The process involved going to senior lenders and asking them to accept a shareholding in the company that will be formed following the restructure in exchange for a reduction in the debt owed to them.
Days before New Year, 95.45% of Edcon's senior secured creditors and 84.18% of super senior third-ranking creditors voted to adopt compromise proposals.
Once the restructuring process is complete, Edcon's debt will fall from R29bn to R7bn.
Brookes said he was pleased that the group would soon be able to move forward, having substantially reduced its debt. "In tandem with the restructuring, we continue to advance all of our other change initiatives at a rapid rate."
Brookes said the group had made tremendous progress in enhancing the customer experience with better service and products; improving employee motivation and authority levels; and simplifying many processes and structures.
"We believe these initiatives will return Edcon and its various stores to be leading retailers in their respective sectors."
Following the acceptance by note holders, Edcon said it was on track to implement the restructuring agreement during the course of January.
The debt-to-equity deal was announced in September and entailed a comprehensive capital restructuring of the group. Brookes said at the time a fouryear plan was in place that would end with a JSE listing.
The Competition Tribunal approved of the transaction in November. Some of the private equity investment firms and banks that will own Edcon are Franklin Templeton, Harvard Pension Fund, Barclays Africa and FirstRand.
For the eight months to November 30 2016, Edcon group sales were slightly ahead of forecast and the gross profit margin was slightly behind, in each case declining 7% compared with the year-earlier period. The figures were based on preliminary internal information, Edcon said. Credit sales were in line with estimates.
"Edcon's fiscal year-to-date performance has been affected by a large-scale stock clearance initiative and adverse macroeconomic conditions in SA," the company said.
Source: Business Day
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