Times Of Swaziland: CANHAM’S BID TO STOP SALE OF 3 SUN HOTELS

CANHAM’S BID TO STOP SALE OF 3 SUN HOTELS
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Stanley Khumalo on 26/09/2022 08:55:00


MANZINI – An effort to stop the sale of the three hotels under Sun
International Management Limited by Canham Mining International (Pty) Ltd has
fallen through.
It was gathered that Canham Mining International (Pty) Ltd had written to the
liquidators, seeking that the sale of the three hotels, which are SwaziSpa Hotel
and Casino, Lugogo Sun, and Ezulwini Sun, be stopped as they had a contract with
them. It was gathered that Canham Mining International (Pty) Ltd had sought that
the matter be sent to arbitration and as such, suggested senior legal
professionals for the arbitration, failing which the Law Society should appoint
the arbitrator.
Agreement
Initially, a sale agreement had been reached between Canham Mining International
(Pty) Ltd and Manzane Estates Limited-Ezulwini Properties Limited in Liquidation
for the sale of SwaziSpa Hotel and Casino, Lugogo Sun, and Ezulwini Sun,
following the liquidation of five companies under Sun International Management
Limited. Canham had agreed to buy the properties in a deal that was signed in
Matsapha and Sandton on May 24, 2022. The parties agreed on a price of E782 601
571, with a 10 per cent deposit due within two days of the signing of the
agreement.
However, Canham was unable to fulfill the agreement. The buyer defaulted on the
deposit and the final balance, the latter due within 45 days after the signing
of the agreement. The liquidation committee’s lawyer, Nkosingivile Dlamini,
said the deal fell through after Canham defaulted on the agreement.
Shareholders
He said they were left with no choice but to come back and report to the
shareholders and creditors on the fate of the deal, and also to seek their
guidance on a way forward. Subsequent to these developments, Dlamini was sought
for comment following the collapse of the deal with Canham Mining International,
shareholders and that creditors had agreed in principle that the sale of the
three hotels under Sun International Management Limited be restarted. Dlamini
was asked to outline the status of the sale currently and what was being done by
the liquidators to put it to finality. He was also asked if the sale would now
be conducted through an auction and if yes how? He was also informed that this
publication had gathered that Caham Mining International (Pty) Ltd was claiming
that it had a contract of sale (with the liquidators). Dlamini was requested to
outline their (Caham Mining International (Pty) Ltd) bone of contention and the
response by the liquidators as this publication had gathered that they wanted
that aspect (alleged dispute about the contract) to go on arbitration.
In response, the liquidators’ lawyer said the liquidators were mandated by the
body of creditors and members to issue a second request for proposal (RFP). He
said: “They were required to broaden the scope of the advertising to South
Africa and abroad. The Liquidators will therefore be putting up the properties
by way of private treaty with the assistance of external experts in disposal of
assets of such magnitude.” Dlamini said Canham Mining International (Pty) Ltd
was under the impression that the sale entered into with his company was still
valid though the company failed to perform as per the terms  of the agreement
which did not come into full effect as the conditions precedent were not met. He
said the liquidators have therefore indicated that they would not participate in
any purported arbitration that emanated from an agreement that never came to
life.
Creditors
It is worth noting that on August 26, 2022, this publication reported that
shareholders and creditors of Sun International Management Limited  had taken a
resolution that the process should be restarted, with RFPs (requests for
proposals) advertised both locally and in outside markets, specifically the
Republic of South Africa, to expand the search for a buyer.
It was reported that the RFPs would be for both movable and immovable assets.
Co-Liquidator, Paul Mulindwa was quoted outlining that assertions that the sale
process was private had been misguided because the RFPs were advertised
extensively in the local press. He said any interested party could have come
forward with a bid. There remains a need to expand the process to South Africa,
Mulindwa said, so that a vast market can be accessed.
The co-liquidator said if one were to be honest, there was only one institution
in the country that was positioned to raise E500 million and up to E1 billion as
the market was very small, and had limited the entire process. He said should
the restarted process fail, it may be necessary for the parties to consider
re-visiting unsuccessful bidders from the first round to see if they could
increase their bids in order to close a sale. He said if that failed, the
liquidators may have to go to a public auction as a last resort. In the initial
bidding, other than Canham Mining International (Pty) Ltd were Eswatini National
Provident Fund (ENPF), Yeoman Properties (PTY) Ltd, WZN Investments (Pty) Ltd
and Africa Orbit Holdings (Pty) Ltd.
According to a report of the master of the High Court, compiled by the
co-liquidators, Marisa Boxshall-Smith and Paul Mulindwa on April 22, 2022, the
Creditors Committee ranked the bidders.  On top of the list was Canham Mining
International, followed by ENPF, Yeoman Properties, and WZN Investments. Africa
Orbit Holdings came last.
Liquidation
The sale agreement between Canham Mining International (Pty) Ltd and Manzane
Estates Limited-Ezulwini Properties Limited in Liquidation was signed on May 24,
2022. The agreement stated that Canham Mining International (Pty) Ltd shall, not
later than 45 days from May 27, 2022; furnish the conveyancers with an
unconditional and irrevocable bank guarantee in favour of Swazi Spa Holdings and
its subsidiaries from a commercial bank registered in Eswatini, for payment of
the balance as approved by the seller. Dlamini (liquidators’ lawyer) said
Canham failed to fulfill the agreement even after an extension was granted to
the end of July 2022.