A R1-billion smart electronics factory in East London, Yekani Manufacturing, is seeking business rescue in an effort to avoid being liquidated, according to a newspaper report on Wednesday.
The Daily Dispatch reported (pay wall) that Yekani Manufacturing has opted for business rescue to avoid liquidation by Standard Bank, but that the bank is opposing the move in court. If the plant is closed, 500 people could lose their jobs.
The electronics manufacturing facility, which until last year made decoders for MultiChoice Group, faces the prospect of liquidation after it reportedly failed to make repayments on a multimillion-rand loan from Standard Bank.
The hi-tech facility failed to reopen after the December holiday break.
Its financial woes come just 18 months after Yekani unveiled the new, R1-billion factory in the East London Industrial Development Zone that would do contract electronics manufacturing for a large range of clients.
The high-profile launch was attended by former Eastern Cape premier Phumulo Masualle and trade & industry minister Rob Davies. The minister said at the time that the facility would eventually create a thousand new jobs and was a flagship investment by a black-owned company). Government invested R50-million in the plant.
Yekani manufactured the DStv Explora satellite decoder for pay-television operator MultiChoice, along with cellphones, tablet computers, and other devices and components.
In its report on Wednesday, the Daily Dispatch said Standard Bank is claiming R88-million from Yekani Manufacturing, while CEO Siphiwe Cele said the amount was “not more than” R60-million. — (c) 2020 NewsCentral Media