Jul 30, 2015
S.Africa's Edcon appoints new CEO after debt restructuring
Jul 30, 2015
South Africa's retailer Edcon has named Bernard Brookes as its new CEO, the retailer said on Thursday, after the company restructured some of its debt to repay bondholders.
Brookes, a veteran of Australian firms Woolworths and Myer, takes office on September 30, two months after bondholders accepted an offer that gave Edcon more breathing space.
Fixing operations would only be part of Brookes' mandate but another round of debt restructuring looms in the future, said Daniel Isaacs, an equity analyst at 36One Asset Management.
"With the amount of debt Edcon has it will take more than a new CEO," said Isaacs. "To fix business operations is just half the story."
Edcon said on Wednesday the debt restructuring would decrease its interest payment obligations by more than 1 billion rand a year and lower the debt that affects its cashflow by about 5.9 billion rand.
The operator of stores such as Edgars, Jet and CNA was taken private by Bain Capital in a heavily leveraged buyout in 2007.
Brookes replaces Jurgen Schreiber, amid a drop in credit sales as consumers in Africa's most advanced economy have tightened their belts in the face of the first interest rate increases in six years.
"He has significant experience not only in apparel retailing in the southern hemisphere, but also specifically department stores and emerging markets," Edcon chairman Dwight Poler said.
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