Turning SCRAP GEAR into liquid cash

THE current economic challenges emphasise the need for business decision-makers to reduce cost, increase turnover and to optimise the efficient application of resources, says Park Village Auctions.

The identification of superfluous or redundant assets for disposal is an appropriate step in this direction as it reduces holding costs, wear and tear, pilferage and opportunity cost - generating capital by unlocking liquid cash, says Bertie Saunderson of Park Village Auctions (PVA).

One of the quickest and most transparent methods of achieving these objectives is the public auction sale method, he says.

"The unlocking of value is a generally accepted business imperative that improves the overall performance of a given business. A public auction sale is an effective outsourcing model that enables a business to focus on its core activities while the auctioneer takes care of the sale of non -core assets.

"The democratic competitive bidding process has wide appeal in that it dispenses with the tedious selling price negotiations that arise in private treaty and tender sales - and it aids the realisation of assets at fair values.

"Furthermore, the lead time between the sale and the final settlement to the seller is fairly short as payment is not hampered by the suspensive conditions that frequently apply in a private treaty sales transaction.

"Indeed, PVA will not release any asset unless payment has been received in full and the payment has been cleared by the bank.

"Moreover, an important socio-economic benefit that arises from auction sales is often overlooked in that start-up businesses and sole traders are some of the buyers at public auction sales.

"Their participation in the buying process enables them to become self-reliant, grow their businesses, employ staff, pay taxes, and embark on the path of active participation in the economy. This is a perfect example of where the disposal of redundant and non-core assets can spur trickle-down economic activity."

PVA has a national and a regional footprint having executed several public auction sales for various mining houses, the engineering sector, banks, liquidators and the like, says Saunderson.

lFor further information contact 011-789-4375/6/7 or go to www.parkvillageauctions.co.za