Factors influencing the provision of turnaround finance to financially distressed companies in SA

Abstract

The major theme of the research relates to the factors which influence the provision of turnaround finance to financially distressed companies in South Africa. The purpose of this study is to identify and investigate the factors influencing the provision of turnaround finance from a macro-environmental, industry-wide, and company-specific perspective. The key findings in relation to the influencing factors were distilled into broad recommendations for consideration by the shareholders and managers of financially distressed companies when attempting to secure turnaround finance. The study employed the use of semi-structured, elite interviews with senior executives within the professional fields of law, corporate finance, specialist finance, and turnaround management in an effort to incorporate a wider context in relation to the research problem and to overcome the limited data phenomenon relating to researching turnaround situations. The findings of the study are that the provision of turnaround finance to distressed companies represents a means to restore corporate value in economically viable distressed companies and the factors which influence the provision thereof exhibit interrelationship which shareholders and managers of distressed companies need to understand and appreciate in order to successfully secure turnaround finance.