Corporate rescue in South Africa has been bedevilled by many challenges. The new South African Companies Act 71 of 2008 (hereafter referred to as “the Act”), which came into effect in May 2011 contains a new chapter titled “Business rescue and Compromise with Creditors”. Post commencement finance (PCF) is finance or credit approved for a company in business rescue, which is regulated by section 135 of the South African Companies Act. The Act provides for companies to secure PCF as turnaround investment to secure its financial well-being. However, it is difficult for a distressed business to access PCF as it is challenging to operate on a cash basis when they face the likelihood of insolvency or forced sale of their assets to remain sustainable. This was evident during the recent global financial crises when obstacles to accessing PCF were identified as the chief deterrent for businesses that require rescue or reorganization (Pretorius and Du Preez, 2013). A review was performed to assess what the impact was, of a distress company obtaining PCF in KZN. Empirical research includes a qualitative research design engaged to explore the impact of PCF on the success of business rescue efforts for distressed companies in KZN. Insights and understandings were drawn from the participation of business rescue practitioners in Kwa Zulu Natal. This included addressing the challenges of obtaining PCF and what finance is available. The findings from the literature review confirm that the barriers to obtaining PCF are the most limiting factors in rescuing businesses in distress in KZN and the challenges include the time frame within the business rescue plan and that financial institutions are not prepared to support a business rescue without collateral.

In South Africa (SA), business rescue was introduced in 2011 to assist financially distressed companies. However, the COVID-19 pandemic triggered an avalanche of economic uncertainties, and in 2020, SA became the fifth highest country affected by COVID-19 infections, resulting in a total shutdown of all businesses, except for essential services. The combined effect of lockdown levels and collapses in supply chains resulted in a 42% increase in companies filing for business rescue between April and October 2020. This study diagnosed the shortcomings of the current business rescue legislation, in the context of a pandemic, which could have affected the financial rehabilitation of those companies applying for business rescue. The discussion is grounded on existing business rescue literature. This study comprised of a critical review of existing literature, as a methodology to conduct the study. The study identified several shortcomings such as inadequate time frames for the business rescue process, insufficient definition of reasonable prospect and a lack of procedures for a company filing for business rescue in a pandemic that could have impacted distressed companies and compromised prospects of resuscitation. The study recommends that amendments be made to current legislation as a panacea for distressed companies due to COVID-19.