Valuation practices under business rescue circumstances in South Africa

Background: A business rescue plan should indicate the benefits of adopting a as opposed to immediate liquidation. Performing valuation is thus vital aspect process estimated values determine amount be divided between creditors and, if possible, shareholders. Conventional methods have underlying assumption that going concern (based on liquidy and solvency tests). However, company in not necessarily concern, nor liquidation, leaving grey area terms valuation. Aim: This research explored how value financially distressed determined. Setting: The setting for this study was South Africa. Method: Thematic analysis qualitative data collected through 11 semi-structured interviews with senior practitioners (BRPs). Results: When intention return solvency, BRPs prepared short-term, undiscounted cash flow budget value, but without including terminal projected flows. In contrast, when obtain better compared follow an asset approach value. results also showed business, digital relational acumen BRP major influencer Conclusion: financial elements identified substantiated may serve best practice guidance industry lead expansion existing theory.