Paramount Group division Paramount Combat Systems is going into business rescue, and a business rescue practitioner has been appointed.
In a letter to creditors, Paramount Combat Systems said the board of Directors of the Company adopted a resolution on 31 January 2018 whereby the company voluntarily starts business rescue proceedings.
Consequently, a notice to begin business rescue proceedings was filed with the Companies and Intellectual Property Commission on 5 February 2018. Paramount Combat Systems appointed Sipho Eric Sono to be its business rescue practitioner on 6 February. The business rescue practitioner will meet with creditors on 20 February.
It is understood that the business rescue only affects the Isando-based Paramount Combat Systems and vehicle manufacture elsewhere is unaffected.
Paramount on Thursday said the Paramount Combat Systems unit “has been put under pressure by delays in revenue collection, and by the challenges of operating an export orientated industrial facility in South Africa in an environment of intense political uncertainty. These issues include labour challenges, increased operating costs and the significant strengthening of the Rand. All of these have impacted negatively on export competiveness.
“The Board of Paramount Combat Systems (Pty) Ltd has taken a decision to address these challenges head on and has placed the business into voluntary business rescue, so that it can focus on restructuring the Company to restore healthy operations and implement its significant pipeline of future orders.”
Paramount Group emphasised that Paramount Combat Systems is one of several land forces manufacturing facilities that the global Group has in South Africa and around the world and that the operations of the other land systems units are unaffected by the business rescue proceedings.
“The Paramount Group of Companies has, over the last 24 years grown into a global player in the aerospace and defence industry. The Paramount Group has always promoted skills and technology transfer programmes in the countries in which it operates. In a world of increasing global competitiveness Paramount Group remains firmly committed to building business units around the world that are nimble, price competitive and able to address changing market dynamics,” the company said.
Vehicle manufacturing continues in places such as Kazakhstan where Paramount has established facilities.
Paramount took control of the Isando facilities from DCD Protected Mobility in April 2015, which were integrated into what became Paramount Combat Systems. Paramount wanted to develop the facility so that it had the capacity to produce more than 400 vehicles a year.
DCD Protected Mobility sold the Isando site to Paramount as it had excess capacity following the downturn in the armoured vehicles market after the American drawdown in Iraq and Afghanistan.
Paramount Combat Systems is one of the manufacturing facilities of Paramount Group’s land systems business. According to the company, Paramount’s land systems businesses offers an advanced family of armoured and mine protected vehicles, camp systems, communications, force protection and logistics support. Paramount’s armoured vehicle range comprises the Matador and Marauder Mine Protected Vehicles (MPV), the Maverick Internal Security Vehicle (ISV), the Mbombe 4×4 and Mbombe 6×6 Armoured Fighting Vehicle (AFV) and Mbombe 8×8.
The Land Forces solutions extend to the provision of fully equipped and supported camp systems comprising troop accommodation, shelters, mobile kitchens, field hospitals, power supply, water sanitation and force protection infrastructure.