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Status of Business Rescue in South Africa

by Eric Levenstein, Director, and Head of Insolvency, Business Rescue & Restructuring practice, and Malachizodok Mpolokeng, Candidate Attorney of Werksmans Attorneys

With the year 2021 in the rear-view mirror, one reflects on the Covid-19 pandemic, its associated waves, lockdowns, and restrictions, as well as a struggling world economy, which have all contributed to challenging conditions for businesses in South Africa. Notwithstanding these less-than-ideal circumstances, South African businesses have shown resilience, by adapting to and overcoming the pandemic’s novel challenges. Despite this, certain companies inevitably experience financial distress and opt to file for business rescue.

In this publication, we take a look at the latest statistics on business rescue in South Africa, as set out in the Business Rescue Proceedings Report, recently issued by the Companies and Intellectual Property Commission (“CIPC”). The purpose of this CIPC report is to provide statistical overviews and data comparisons of business rescue filings in South Africa, from the inception of business rescue proceedings (on 1 May 2011) up to 31 December 2021. This publication is aimed at providing a useful snapshot of business rescue in South Africa, in view of the latest statistics.

Active business rescues  

Based on the latest statistics from the CIPC, there are 1,658 active business rescue proceedings in the country, which represents 39% of all business rescue proceedings commenced as at 31 December 2021. About 18% of business rescue proceedings have resulted in their respective business rescue plans being substantially implemented, whilst only 511 ended up in liquidation. Most business rescues, however, end by way of the filing of notices of termination by the respective business rescue practitioner.

Types of companies that are placed into rescue

The overwhelming majority of companies that make use of the business rescue mechanism are private companies. As at 31 December 2021, private companies made up 69% of the companies that were placed into business rescue proceedings. Since business rescue’s inception, only 97 public companies (2%) and 3 state-owned companies (0.07%) were placed under business rescue supervision. It must be noted, however, that during the 2021-2022 period, only 257 companies were placed into business rescue. This number is significantly less than the 373 business rescues, recorded during both the 2019-2020 and 2020-2021 periods.


Majority of business rescue filings occur in Gauteng, followed by the Western Cape and Mpumalanga.

Read more on The Basics of Business Rescue here

Reasons for business rescue terminations

The majority (55%) of business rescue terminations occur because the entity in question is not financially distressed. In close second (33%), business rescues are terminated by business rescue practitioners, in order for the entity in question to commence liquidation proceedings. Only in a limited number of circumstances do business rescues terminate on the basis that the relevant business rescue plan is not accepted (4%).

Substantial Implementations and Liquidations

From the inception of business rescue, only about 18% of business rescues end by way of the filing of a notice of substantial implementation of the adopted business rescue plan. On the other hand, only about 12% of business rescues were converted into liquidations by way of court orders.

Volume of Business Rescue Proceedings

During the period 1 April 2021 through 31 December 2021, 257 companies filed for business rescue.  In comparison, 280 companies filed for business rescue during the period 1 April 2020 through 31 December 2020. Accordingly, the number of new filings for business rescue has decreased during the abovementioned period of 2021.

Business Rescues vs Liquidations

The statistics indicate that more companies are liquidated than placed into business rescue. This trend is not unique to 2021, as this was also observed in 2020. For the period 1 April 2020 through 31 December 2020, 280 companies were placed into business rescue, whilst 1,657 companies were placed into liquidation. In contrast, for the period 1 April 2021 through 31 December 2021, 256 companies were placed into business rescue, whilst about 1,973 companies were placed into liquidation.


Business rescue proceedings are utilised by companies engaged in a wide variety of industries. For the period 1 April 2021-31 December 2021, we have seen, in the main, fallout (in descending numbers) in the manufacturing; agriculture, forestry, and fishing; construction, and wholesale industries. It is worth noting, however, that there have been fewer filings for business rescue in the previously “hard-hit” accommodation and food service; arts, entertainment and recreation; real estate, and wholesale industries.

The decrease in filings in these industries (in comparison with the numbers from the 2020-2021 period) is most probably due to the easing up of Covid-19 restrictions that previously affected those specific sectors.


In view of the information set out above, it is apparent that business rescue proceedings are still an option for financially distressed companies in South Africa. However, it is evident that there has been a decrease in the number of filings for business rescue, in comparison with the numbers observed over the 2020-2021 period. This is without a doubt indicative of the resilience of businesses in South Africa, as well as the return to normal business operations.

However, having said this, it is important not to view numbers in isolation. Whether we will see an increase in filings for business rescue in 2022, or a further decrease, remains to be seen.


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