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Wednesday, 10 April 2024 22:03

Electronics group Ellies shutting down after a decade.

By Lehlohonolo Lehana.

Manufacturing, trading and distribution company Ellie, which has been a South African household name for decades, will be liquidated, it announced in a statement on Sens late on Wednesday.

The company advised shareholders that its business rescue practitioner has concluded that there is no reasonable prospect of it being rescued, and an application will be made to the court for an order "discontinuing the business rescue proceedings" and placing the company "into liquidation".

This comes after the business was placed into voluntary business rescue in January when a planned acquisition of Bundu Power, which it had hoped would put it on a firmer footing financially, fell through.

That deal was subject to debt funding from Ellies' bankers and the approval of shareholders. The bankers advised Ellies that they were not prepared to fund the acquisition, imperilling the turnaround plan and sending the company's shares crashing to 1c, the lowest they can trade.

Ellies Electronics was founded in 1979 by the late Elliot ("Ellie") Salkow, who passed away in 2021. 

When the interim results were published, it showed that the group's revenue dropped by 30.6% to R353 million.

Its loss per share increased by 205% to 13.23 cents, while its headline loss per share increased by 190% to 13.3 cents.

The group said that 'manageable levels of load shedding' worked against it.

"The continued and increased load shedding, whilst negatively affecting the economy and which had historically benefitted the group, decreased significantly from May 2023 as Eskom's planned maintenance was postponed and the use of diesel for Open Cycle Gas Turbines kept load shedding at manageable levels," it said.

"This resulted in a significant decrease in demand for inverter trolleys and solar products and, together with an oversupply in the market, has negatively affected Ellies' revenues for the period under review."

Despite Ellies' statement, South Africa has experienced a solar boom, with millions imported in 2023.