Johannesburg - The consortium of banks that lent to Retail Apparel Group (RAG) gave the management of the group two years to turn the business around and were extremely patient in trying to secure RAG's financial situation, Trevor Murgatroyd told the RAG 417 inquiry yesterday.
During his third day of evidence Murgatroyd, the head of Absa's workout and recovery unit, said that in a letter from Absa's attorneys to RAG on May 23 2002, RAG management was told Absa would take the lending facility back to R140 million from R129 million immediately and review the situation six days later.
Advocate Steph du Toit questioned the purpose of the banks undertaking yet another review of RAG, given the banks had rejected every business plan presented to them up to that date.
Du Toit also pointed out that while the banks exhibited patience they had managed to reduce their exposure by R70 million and to obtain security for their exposure.
In an indication of the tenuous nature of RAG's existence in the months before it was placed in liquidation, the inquiry heard that earlier in May 2002 in an e-mail between executives of the banks, RAG management was given 24 hours to present an acceptable turnaround plan, which would include a repayment programme, failing which the banks would have no option but to recall their facility.
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