Paramount Industrial Holdings (PIH), part of the Paramount group of companies, has entered into business rescue amid legal disputes in another Paramount business division. Other subsidiary companies in South Africa are expected to continue operating as usual.
The PIH board made the decision on 11 November, News24 reported, and quoted documents submitted to the Companies and Intellectual Property Commission (CIPC) as saying South African operations were experiencing “significant financial distress”, which posed a “serious risk to its ongoing sustainability”.
News24 added that the financial stress is due to a dispute between the parent company in the United Arab Emirates – Paramount Group Limited ADGM (Abu Dhabi Global Market) – and unmanned vehicle manufacturer Abu Dhabi Autonomous Systems Investments (ADASI). In August, Paramount ADGM filed for Chapter 11 bankruptcy protection in Delaware, United States, over the dispute.
Paramount said that a limited number of its non-operating entities voluntarily filed for Chapter 11 protection in the United States after an arbitration award issued in August 2024, stemming from a dispute initiated by ADASI in 2022.
Chapter 11 proceedings mean funding has been cut off to South African operations. Paramount Industrial Holdings director Willem van Biljon said in his CIPC filing that Paramount’s South African holding company and subsidiaries usually received funding via a loan facility from Paramount Group Limited in the UAE. However, the parent company could no longer lend money to the South African companies, as the funds were inaccessible due to the bankruptcy filing.
Paramount Industrial Holdings now has to rely “solely on its own revenue to manage the liquidity of the company and its subsidiaries”, News24 reported. “The company remains committed to supporting its subsidiaries and to retaining the PIH group’s workforce to the extent possible. However, without immediate intervention, the company’s cash reserves will be insufficient to cover ongoing operational and administrative expenses as well as its payments due to existing creditors,” he said.
Placing Paramount Industrial Holdings is now looking to reorganize and provide for operational expenses and working capital.
The CIPC lists Paramount Industrial Holdings as being in Business Rescue, whereas other South African Paramount companies are listed as being In Business, and these include: Paramount Aeronautical Solutions; Paramount Aerospace Holdings; Paramount Aerospace Industries; Paramount Aerospace Innovations; Paramount Aerospace Systems; and Paramount International.
