NO GUARANTEE FOR E1BN SWAZI SPA BID

MBABANE – The story of the E1 billion in bids for the purchase of Swazi Spa Holdings has been described by the master of the High Court as one that is colourful without any meat.

The assertion by the master is contained in an affidavit deposed to by her Deputy, Lindelwa Magagula, in the matter where the appointment of Co-Liquidator Paul Mulindwa has been challenged. The current state of affairs, which is now subject to litigation, might result in the liquidation process dragging even further. Already, the process has been granted an extension of six months.  In the latest developments, a dispute of facts has risen between the parties involved, which include among others the amount of work done so far and the offers made to purchase the assets.

Appointed

Mulindwa, who is the second respondent in the matter, was appointed by the master to work together with Marissa Boxshall Smith, the third respondent. The Sun International Management Limited, which is the first applicant in the matter, is challenging the appointment together with four other applicants which are Nedbank Swaziland Limited, former employees of SwaziSpa, Eswatini National Provident Fund (ENPF) and Chick-Fil-A Swaziland (Pty) Limited. In the affidavit, Magagula submitted that the liquidator had claimed that she had received financing for E1 billion and the same was deposited into a bank, and that the deposit was to be verified by the creditors committee.

The deputy master said upon further investigations and enquiry, the story changed to the effect that the interested bidders only showed their bank statement, but had either refused and or failed to file bank guarantees. “I am advised and verily believe that the creditors committee were on the belief that they had secured buyers, only to be made aware by the second respondent that the documents in the possession are just offers with no guarantee that the funds can be released to purchase the properties,” reads part of the affidavit by the deputy master.
The veracity of the claims by the deputy master is yet to be tested by the court. She mentioned that the co-liquidators virtually met the creditors committee on April 11, 2022, where the issue was discussed. According to Magagula, currently, the co-liquidators were working on trying to get the bidders to prove commitment of funds for the sale and were also working on getting timelines for the availability of the funds.

Creditors

She said the co-liquidators had now put strict terms to the bidders to file bank guarantees by Friday April 22, 2022, so that a name could be presented to the creditors in the next meeting.
Magagula said she denied that 85 per cent of the liquidation work had been done. Instead, she said, the second respondent (Mulindwa) has maintained the premises, but the process of liquidating the group of companies was at an infancy stage or around 10 per cent if one had to take into account the advertised request for proposal and offers. “Let us wait and see what happens on April 22, 2022,” said Magagula. In justifying the appointment of the co-liquidator, she stated that it had brought life and direction in the whole matter.

“What has been happening all along is akin to a criminal lawyer repeatedly telling the judge that ‘my client has a strong defence to the murder charge and given the chance we will unpack the defence in half a day’. This will go on and on with much colourful explanation. “The creditors will one day ask as to who the bidder is because the story of E1 billion is colourful without any meat,” she said. She said she was hopeful that in the next creditors meeting, there will be realistic proposals including deeds of sale and bidders’ proof that they have approached the Competition Commission, Land Management Board and Gaming Board. Magagula said if there was no progress, the creditors should be given a clear picture of the many empty promises. She maintained that the reports she received from both liquidators were that they were working pretty fine together and that the liquidation process would be finalised soon. “The second respondent has been brought up to speed by the third respondent,” she explained. Elaborating, she mentioned that on April 1, 2022, both liquidators met a potential buyer and they inspected all the premises of the group of companies.

Committee

Furthermore, she said they met with the creditors committee on April 6, 2022, and everything went smoothly according to what was reported by the duo through their attorney. The deputy master said there was no fighting among the parties and the fears were unfounded. She also submitted that she did not have a personal interest in the matter at hand, but was guided by the enabling statutes. “I cannot sit around and watch the third respondent’s powers curtailed. She must act independently of the creditors. There is no reason why the co-liquidator ought to be interdicted from carrying on with his function. The third respondent is not opposed to his appointment,” she said. Magagula also submitted that the application challenging the appointment was based on speculation and unjustified fear, yet the co-liquidator had vast experience in liquidation matters. She said the offers for the purchase of assets were now really moving and the creditors would be happy as no harm would be occasioned by any of the two liquidators.

Post your comment

Your name:

Your e-mail address:

Add your comments:

Please enter the code you see in the image:

Image:

Code: