Blue Financial Services Group: The Perils of Rapid Growth

Author :

Dr Thabo Mosala & Eulalie Metton

Pages :

20 pages

Product Type :

Case

Reference # :

WBS-2013-21

Teaching Note :

not available

Institute:

Wits Business School, University of the Witwatersrand

Setting:

South Africa

Year:

2013

Keywords:

Strategy, Finance

Summary/Abstract:

It was June 2010 and Dave van Niekerk, the chief executive officer (CEO) of micro-lending company Blue Financial Services (BFS), had just handed in his resignation. BFS, which listed on the Johannesburg Stock Exchange AltX in 2006, had in less than four years expanded its operations to 15 African countries from an original five and employed more than 3 000 people. During this time, however, the company had faced escalating problems that had resulted in a write-off of more than R1 billion and a share price – which had reached a high of 700 cents – dropping to 15 cents. A rescue deal by turnaround expert Johan Meiring of private equity firm Mayibuye Group (Pty) Ltd was on the cards, and had forced van Niekerk’s resignation. Van Niekerk asked himself what had gone wrong and could the company, under new management, be saved?