Why timing, transparency and trust will define 2026

If there is one place where the economic mood of the country becomes visible early, it is at the coalface of business rescue, restructuring and insolvency (BRI). This is where stress shows up before it hits headlines - in cash flows, supply chains, boardroom conversations, and increasingly, in directors' personal liability concerns.

Speaking to Gareth Cremen, Partner at Cox Yeats Attorneys and head of its Johannesburg Business Rescue, Restructuring, Insolvency and Insurance practice, it became clear that 2025 was not simply a difficult year - it was a revealing one. It exposed how differently businesses respond to pressure, and how leadership decisions made early or late can mean the difference between recovery and collapse.

Two economies, one year - Looking back at 2025, Cremen describes a clear bifurcation in outcomes. On one side were businesses that engaged early with restructuring tools, data-driven interventions and stakeholder engagement. These businesses generally stabilised, preserved value, and retained optionality. On the other side were companies that delayed action until liquidity was exhausted. For them, outcomes were far more constrained - they struggled to achieve solvent outcomes.

Macroeconomic headwinds amplified this divide. Tight monetary conditions, patchy demand, logistics constraints and elevated input costs all kept pressure on working capital. At the same time, boards became far more conscious of their duties in what lawyers refer to as the "zone of distress" - that uncomfortable space where solvency is uncertain, but decisive action is still possible.

Importantly, Cremen notes that business rescue is no longer seen only as a last resort. Directors are increasingly recognising its practical advantages over a free-fall liquidation, particularly when it comes to preserving enterprise value, protecting jobs, and limiting downstream economic damage.

What 2026 is likely to bring - Looking ahead, Cremen expects 2026 to deepen several trends already in motion. Early, data-led interventions and creative capital solutions will become more common. Pre-packaged turnarounds and section 155 compromises are likely to increase, particularly where balance sheet restructuring is required but a full business rescue is unnecessary. Distressed mergers and acquisitions are also set to accelerate, as buyers selectively pursue quality assets out of stressed groups, especially in sectors such as insurance, manufacturing, agri-processing and logistics.

In insurance, capacity is available but disciplined underwriting with risk engineering and data transparency is increasingly shaping pricing and coverage. For businesses that invest in forecasting discipline, procurement savings, and operational resilience - especially in energy and logistics - the next cyclical upturn could offer real opportunity. Those that do not may find themselves overtaken long before growth returns.

Why early intervention matters beyond the balance sheet - There is a tendency to view restructuring purely through a corporate lens, but Cremen stresses that its consequences are deeply human. The restructuring cycle has real economic consequences. Where intervention occurs early, going-concern value is safeguarded, jobs are preserved and suppliers are kept paid. That stabilises local ecosystems in mining services, manufacturing, retail and agri-processing towns where a single employer often anchors a community.

Late intervention, by contrast, converts unsecured creditors into write-offs, deepens supplier distress and triggers knock-on failures. Effective business rescue reduces what economists call the "deadweight loss" of insolvency. It improves credit discipline over time, lowers the cost of risk through the cycle, protects the tax base and supports productive investment. Over time, that sustains supply chain continuity and underpins a more investable environment. In short, it is not just a legal mechanism - it is an economic stabiliser.

The leadership signals boards miss - Asked where warning signs typically become clear, Cremen is unequivocal: cash flow governance is the first failure point. Many boards do not maintain a twelve-week rolling cash flow forecast updated weekly, supported by strict cash controls and daily liquidity huddles. Without it, decision-making becomes reactive rather than strategic.

Strong leadership in distress requires hard prioritisation of critical suppliers and governance discipline. An independent sub-committee of the board or experienced external advisers can help ensure decisions reflect directors' duties and the business judgement rule in the zone of insolvency, while protecting directors from personal liability.

Operationally, leaders must move quickly on margin protection and working capital. Loss-making products should be re-priced or exited, not defended out of nostalgia. Supply and customer terms should be renegotiated early. Non-core assets should be monetised where appropriate, and bridge funding secured with covenant resets and appropriate security packages - so the business has runway to implement a credible plan.

Perhaps most importantly, transparent, regular communication with lenders, employees and major suppliers is non-negotiable. It builds confidence and can unlock forbearance while milestones are delivered. When businesses retreat into silence, trust collapses.