Economic challenges, policy changes and soaring inflation have placed tremendous financial pressure on organisations that should realise that auctions offer a fast and reliable way to convert assets into cash, says Clive Lazarus of Park Village Auctions (PVA).
Lazarus says 2018 has been a turbulent year with the rand’s volatile performance having a devastating impact on many businesses unable to weather the storm on their own, resulting in a busy year for the PVA business rescue division. But before reaching for business rescue, Lazarus suggests businesses should opt to strategically dispose of assets via auction to create liquidity.
“Auctions are not only an efficient way to generate capital but also a superb mechanism for reducing costs and increasing optimising business performance. Identifying and disposing of superfluous or redundant assets via auction allows businesses to curtail holding costs, wear and tear, and shrinkage.
“Public and online auctions appeal to sellers and buyers alike. Sellers, for a start, can effectively outsource the sale of goods to continue focusing on core business.
“The nature of auctions dispenses with sales negotiations and helps to dispose of assets at market-related prices. Lead times are generally shorter than traditional sale methods and the agreement is final, with upfront payment required to conclude the deal,” adds Lazarus.
To best illustrate the value of auctions a means for asset disposal, Lazarus provides results of exceptional PVA sales this year.
All prices realised exclude VAT and buyers’ commission.
* Residential dwelling, Umhlanga Rocks: R5.3million.
* Retail vehicle showroom in Bryanston: R11.6m.
* Specialist mining shaft sinking concern, equipment and assets: R12.7m.
* The former premises of The New Age Media: R29.5m.
* Industrial property (5.2ha) in Germiston: R30m.
* Engineering workshop and specialist laser and plasma-cutting machinery of VR Laser Services: R34.5m.
“Gone are the days when auctions were seen merely as a forced mechanism for recouping bad debt. Today organisations can freely choose to sell assets on auction to access the inherent benefits associated with this method of selling,” says Lazarus.
Contact PVA on 011 789 4375 or go to www.parkvillageauctions.co.za.