It is no secret that the Corona Virus (COVID-19) will have a negative economic impact on businesses and the public alike. There have been significant calls for Government to intervene and reduce this burden; in turn, Government has called on major corporates and South Africa’s top businessmen and women to make contributions towards this relief.
On 2 April, Fin24 published an article which outlines how to access these funds. Below is the key information from that article with my thoughts at the end.
Relief from the Oppenheimers
The article pointed out that Nicky and Jonathan Oppenheimer have pledged R1 billion to support small medium and micro enterprises. The South African Future Trust has been formally established with the initial R1 billion in support, the Oppenheimers said in a statement.
"The SAFT will transfer funds directly to employees of participating SMMEs, via interest-free loans where employees themselves carry no liability," the statement read.
The Fin24 article added that any loans which are repaid to the SAFT will be used to support initiatives which focus on employment creation, until all funds are disbursed, the statement read.
"Our aim is to enable SMMEs to significantly reduce their cash outgoings and continue operations during this time of crisis, while retaining their employees – affording these companies much-needed breathing room to make long-term decisions," it said.
The article pointed out that the SAFT has partnered with four of SA's major banks - ABSA, FirstRand Bank, Nedbank and Standard Bank, and the scheme is available to the clients of these banks to apply for funding.
However, it is important to note that only businesses which were financially sustainable prior to the Covid-19 crisis qualify to apply.
"SMMEs should register their interest directly via one of these banks," the statement read. Applications are expected to start from Friday 3 April. The partner banks have also agreed to waive normal fees in managing the SAFT scheme.
The fund hopes to continue to play a role in supporting economic growth beyond the coronavirus crisis.
For more information visit: https://opp-gen.com/saft
The article added that Mary Oppenheimer has donated R1 billion to the Solidarity Fund, along with her daughters Victoria, Rebecca, Jessica and Rachel.
"My daughters and I have thought long and hard about where we could make the greatest difference in this fight and have decided it is to support the humanitarian needs of everyone living in South Africa. So, we think that it is the Solidarity Fund which is most aligned to our concerns about basic needs, food, medicine, general care and gender abuse," she said in a statement.
For more information visit: https://www.solidarityfund.co.za/
The Motsepe family steps up
The Fin24 article pointed out that South African billionaire Patrice Motsepe and his associated companies have pledged R1 billion.
The companies and organisations include: the Motsepe Foundation, financial services provider Sanlam, African Rainbow Capital and mining company, African Rainbow Minerals, and others.
The Fin24 article adds that the funds will be used to purchase hand sanitisers, disinfectants, Personal Protective Equipment (PPE) and other equipment and resources which might be needed to deal with the pandemic.
"We've been advised that access to water for regularly washing hands is crucial for slowing and limiting the spread of the Coronavirus. We are therefore providing water to poor rural and urban communities by purchasing water tanks (jojos), drilling and equipping for borehole water and also building sanitary facilities," said Motsepe.
The article points out that other short- to medium-term interventions include building additional classrooms, computer centers and laboratories in all nine provinces. "[This is] to assist with the excessively high number of students per classroom in some schools; particularly in the context of the current Coronavirus pandemic and the social distancing requirements.
"Those schools in the poor rural and urban areas which do not have internet access or facilities will be assisted with study guides, scientific calculators, dictionaries and other educational equipment and facilities identified in consultation with the Department of Basic Education, school principals and teachers," said Motsepe.
The article points out that CEO of ARC, Dr Johan van Zyl, said that it is in contact with government Ministers, MECs, and the Solidarity Fund to identify initiatives which the company can partner with.
In a statement to Fin24, Sanlam said that the R1 billion is aimed to help, "alleviate some of the suffering today, deal with some of the big societal issues and help kick-start the economy".
Details of the disbursements will be announced in due course. "We will be working with the relevant stakeholders, and will announce over the next few days and weeks on the pledge we have made. We can state categorically, that none of our plans includes loans," said Sanlam.
"We are currently putting governance structures in place to ensure the effective use for beneficiaries and accountability of the funds," it added.
Relief from the Rupert family and Remgro Limited
The Fin24 article pointed out that this funding will go towards helping small and medium enterprises across the country, and will be administered by Business Partners Limited, a leading risk finance company for SMEs, which is co-owned by Johann Rupert. Business Partners was established in 1981 and provides investment capital and business support to small, medium and micro enterprises.
Ben Bierman, Managing Director at Business Partners, in a statement said that distinct, separate financing programmes would be made available for sole proprietors and formalised SMEs. "We expect to make an announcement regarding the criteria, repayment terms and how to apply for finance this week," he said in a statement.
According to a Moneyweb article, the R1 billion is a donation to a trust which Business Partners will administer for free.
"The unfortunate reality is that Covid-19 will lead to the demise of many SMEs across the world. We believe that through the funding made possible by the Rupert Family and Remgro Limited, together with other initiatives being implemented by both the public and private sector in South Africa, we can help sustain many of the affected businesses and protect jobs for years to come," said Bierman.
The Naspers donation
The Fin24 article points out that Naspers has donated R1.5billion to combat the spread of the Corona virus in the country.
The article adds that part of the donation, R500 million, will go towards the Solidarity Response Fund.
Naspers has also said it will buy R1 billion worth of personal protective equipment (PPE) and other medical supplies in China, in partnership with the Chinese government and Tencent – in which Naspers holds a 31% stake.
The article adds that, in addition to the capital and equipment being provided, Naspers has also made available its facilities to provide public health services in vulnerable communities. The facilities are located in Cape Town – in suburbs Khayelitsha and Philippi. Government is also interested in the facilities in Alexandra near Sandton, according to Naspers SA CEO Phuthi Mahanyele-Dabengwa.
A word from the TMA-SA
Links to some of the key relief funds have been provided throughout the press release.
This is welcome news at a time when there is a lot of concern about how companies are going to find ways to meet their financial commitments. Studies show that in time of crisis and panic, knee jerk reactions are commonplace. This is a concerning reality and is an indication that our services – as business turnaround professionals – will be needed now more than ever. There will be a lot of debt restructuring and companies who will be looking for advice on the best way to allocate the relief funds throughout the business.
Its time for us to make our voices heard.
Read the full Fin24 article