JSE-listed Ellies Electronics has decided to apply to the high court for the liquidation of its manufacturing subsidiary, Ellies Industries, which employs 148 people.

Ellies Industries manufactures and distributes satellite dishes, terrestrial aerials, TV brackets, mounts and shelving solutions. “Arrangements will be made to ensure uninterrupted supply of these products to our customers,” the company said in a statement on Friday.

“This subsidiary has long been underperforming and has been severely impacted by the lack of movement on the digital terrestrial television programme by government. Trading volumes have not been sufficient to generate any profit and the low activity over the past year has not allowed the business unit to recover,” it said.

Ellies said it has made “numerous recovery efforts” to try to rescue the business, including seeking third-party funding and selling the company. It also hired an external consultant last year to assess the operations of Ellies Industries “to assist in improving its viability”.

“Unfortunately, this exercise did not find a scenario that would return the subsidiary to profitability,” the company said.

‘Various challenges’

“It is no secret that this subsidiary has been struggling over the last few years because of various challenges and, while we have put every effort into its recovery, we have unfortunately not been able to turn the business unit around,” said Ellies Electronics CEO Shaun Prithivirajh in the statement.

“It has not been an easy decision to make, but ultimately if this is allowed to continue the contagion will affect the entire group. Decisions that impact directly on people’s livelihoods are deeply painful, but as a board and leadership team, we have a responsibility to ensure the long-term sustainability of the entire Ellies Group,” said Prithivirajh. — © 2021 NewsCentral Media