THE NATIONAL ASSEMBLY
QUESTION FOR WRITTEN REPLY
Question 981
Dr S M van Dyk (DA) to ask the Minister of Trade and Industry:
(1) (a) How many transfers has the Industrial Development
Corporation (IDC) received from the State in order to grant loans to
industrial firms since the 2008-09 financial year until the latest
specified date for which information is available and (b) what are the
criteria in terms of which firms can qualify for a loan;
(2) whether the IDC has granted a loan of about R80 million to a certain
firm (name furnished) while this firm is already technically insolvent;
if not, what is the position in this regard; if so, what are the
relevant details;
(3) whether the IDC has been notified that a certain company (name
furnished) has handed in an application for liquidation against this
firm (details furnished); if so, why is the IDC considering loans
whereby tax money is used to pay this companyâs creditors;
(4) whether his department has been informed that this company owes about
(a) R330 million to commercial banks, (b) R110 million to trade
creditors, and (c) R20 million to the SA Revenue Service; if so, what
is the settlement or arrangement in terms of section 331 of the
Companies Act, Act 61 of 1973;
(5) whether any conditions in the above-mentioned loan agreement to
promote any form of black economic empowerment in this company played a
role in the approval of this loan; if not, what is the position in this
regard; if so, what are the relevant details? NW1188E
Response:
1. The IDC was established by government in 1940. It has not received any
major capital injection since the 1950s and is currently a self
sustaining development finance institution, functioning off its own
balance sheet.
2. The IDC has approved funding from Distressed Sectors Fund towards
Slabbert Burger Vervoer (Pty) Ltd subject to final negotiations with
creditors and the company. The firm is not technically insolvent.
3. The IDC is aware of the application for liquidation against Chevron.
In alignment with its strategy to assist companies that are experiencing
distress as a result of the financial crisis, IDC is facilitating a
longer term funding solution to the company to overcome immediate cash
flow constraints. This is done in consultation with other funders of the
business.
4. The IDC, together with the consortium of funders, are in the process of
filing an application for the convening of meetings of creditors in terms
of Section 311 of the Companies Act.
5. IDC is of the view that it would be inappropriate to facilitate
conditions related to changes in ownership such as black economic
empowerment transaction in this company until such time financial
stability has been restored. The immediate motivation is to preserve
large number of job opportunities; sustain the reliance that many SMEs
have on supply from this company and on its survival; historical and
future financial viability; and the preservation of capacity in the road
freight sector.