Business Rescue Planning for a Construction Contractor

A Namibian construction company with 47 employees that had run into serious cash flow difficulties following a project delay and a disputed payment from a parastatal client.

The company had outstanding payroll obligations of two months, a creditor book of NAD 4.2 million, and a primary bank that was threatening to call in a surety bond. The directors had not yet filed for formal business rescue but were aware that continued trading in the circumstances exposed them to personal liability. They needed an immediate assessment of their options and someone who could act quickly.

We conducted a rapid solvency and liquidity assessment and advised the directors on the business rescue regime under the Companies Act, including their statutory duties in distressed circumstances. We identified the disputed parastatal payment as the pivotal item and prepared a formal demand letter and supporting documentation to escalate the dispute through the appropriate government procurement channel. We simultaneously negotiated payment arrangements with the two largest creditors to create breathing room, and prepared a 13-week cash flow forecast to test the viability of a restructured trading position.

Formal business rescue avoided. The disputed parastatal payment of NAD 1.9 million was released within six weeks following the escalation. Creditor arrangements held. Payroll arrears settled. The company returned to a viable trading position and completed two of its outstanding contracts. The directors received a formal opinion on their personal liability position, which was cleared.