Liquidation applications against 12 Nova companies halted

Nova Property Group, the rescue vehicle of the failed Sharemax investment scheme, has concluded a settlement agreement over more than R12.34 million plus further interest owed by 12 of its companies to the Quatro Group.

The settlement agreement, which relates to amounts owed for security, cleaning, horticulture and property care services provided to various of its shopping malls by the Quatro Group, has resulted in the withdrawal of high court applications to liquidate these Nova companies.

The agreement, which comprises an “Acknowledgement of debt and undertaking to pay” and a cession entered into between the Nova and Quatro groups, was made an order of court by Judge CJ van der Westhuizen in the Pretoria High Court last week.

Read: 12 Nova companies face winding up applications

The repayment terms in the settlement agreement were conditional on the conclusion of a cession in terms of which Liberty Mall Investments (Pty) Ltd, one of the Nova group companies facing liquidation, ceding as security the covering bond over the property in Welkom for the fulfilment of the Nova Group’s obligations.

Should the Nova Group fail to make any payment due and on time in terms of the settlement agreement, the Quatro Group will be able to rely on the acceleration of the agreement, after which the full outstanding amount will immediately become due and payable, and the Quatro Group will be entitled to foreclose the ceded bond.

Authorisation

Nova chair Connie Myburgh entered into the settlement agreement after resolutions were taken by the board of directors of each of the 12 Nova companies in which they acknowledged their indebtedness to the Quatro Group.

The resolutions by these Nova companies further authorised Myburgh to represent the companies in any negotiations with the Quatro Group and enter into any agreement to give effect to these resolutions.

Myburgh told Moneyweb last month when requested to comment on the Quatro Group liquidation applications that “the applications are without merit and are being opposed”.

He added at the time that it would be inappropriate for him to comment any further “at this time” given that the applications are sub-judice.

What the 12 companies owe

Myburgh advised Moneyweb on 11 July that the commercial dispute underlying the liquidation applications had been settled and the applications are being withdrawn.

However, when requested to provide further details and the terms of the settlement agreement, Myburgh said he was not in a position to.

The settlement agreement between the Nova and Quatro groups is dated 11 July 2023.

Agreement

In terms of the settlement agreement, Nova undertook and agreed to repay the indebtedness of its group companies in line with a schedule.

In terms of this schedule, Nova has to pay the Quatro Group:

• R500 000 on 7 July;
• R500 000 by no later than 15 July;
• R1 million a month by no later than the 15th of each month from 15 August until 15 December;
• Settle the outstanding balance by 15 January 2024; and
• R400 000 towards the legal costs Quatro incurred in collecting the outstanding debt, which shall be settled with the outstanding balance on or before 15 January 2024.

In terms of a clause in the settlement agreement, acceleration of payments due shall take place and the full balance of the capital amount outstanding, together with interest payable on this and any other monies due, shall become immediately payable without notice to Nova at Quatro’s option in the event that Nova or any of its entities:

• Fail to make any payment stipulated in terms of the agreement promptly on the due date and following a breach notice of 14 days;
• Fail to observe or commit any breach of any term or condition of the agreement and following a breach notice of 14 days;
• Commit any act of insolvency;
• Enter into business rescue following the conclusion of the memorandum of agreement between the Nova and Quatro groups; and
• Generally do anything that may prejudice Quatro’s rights in terms of the settlement agreement to the extent that it is not remediable within the 14-day breach notice period.

The 12 companies against which Quatro Group launched the liquidation applications are each the owner of immovable property on which the business of a shopping centre is conducted.

They are:

• Carletonville Investments (Pty) Ltd, situated at the corner of Onyx Drive and Paul Kruger Street, Carletonville;
• De Marionette Centre Investments (Pty) Ltd, situated at Blue Crane Drive, Meyersdal, Alberton;
• Flora Centre Investments (Pty) Ltd, situated at the corner of Ontdekkers and Conrad streets, Florida, Johannesburg;
• Liberty Mall Investments (Pty) Ltd, situated at Mooi Street in Welkom;
• Rangeview Investments (Pty) Ltd, situated at the corner of Airport and Rangeview Road, Dalpark, Brakpan;
• Village Mall Investments (Pty) Ltd, situated at 52 Murray Street, The Village, Nelspruit;
• Waterglen Investments (Pty) Ltd, situated at General Louis Botha Avenue, Waterkloof Glen, Pretoria;
• Witbank Highveld Investments (Pty) Ltd, situated at the corner of Theunis Janson Avenue and Albertyn Street, Witbank;
• Tarentaal Centre Investments (Pty) Ltd, situated at the corner of Samora Machel Drive and Kaapschehoop Avenue, West Acres, Nelspruit;
• Amber Sunrise Properties 95, situated at Waterbok Street, Theresa Park, Pretoria North;
• Born Free Investments 552, situated at the corner of the R24, Greenside Road and Palm Avenue, Rustenburg; and
• Planet Waves 120, situated at Mont Rouge Estate, Jack Nicklaus Drive, Hartbeespoort.

Judgment

The settlement agreement with the Quatro Group follows a scathing Pretoria High Court judgment handed down in May in which Nova was ordered to repay R31.4 million to bridging finance provider Beneficio for unpaid loan repayments stemming back to 2017. It was also slapped with a punitive cost order.

Nova was further ordered to pay interest on the outstanding amount owing to Beneficio at an interest rate of 1% per week, amounting to about R313 500 a week.

In addition, Beneficio has the right to auction two Nelspruit-based shopping centres, Tarentaal Centre and Village Mall, which Nova collectively valued at more than R100 million in its most recent annual financial statements.

This will leave Nova with only a handful of income-generating assets in its portfolio.

Read: Another Nova blow

Myburgh confirmed at the time that Nova will appeal this judgment.

‘Tombstone’ mall

In a new development on Thursday, the Companies and Intellectual Property Commission (CIPC) advised George Nell, business rescue practitioner (BRP) for Thumos Properties 1 (Pty) Ltd, that the CIPC compliance notice issued to the Nova Group in July 2022 expressly prohibits Nova from disposing of any immovable properties under its control.

This has thrown into disarray the proposed sale or auction of The Villa ‘tombstone’ mall in terms of a proposed business rescue plan for the developer of the derelict half-built shopping centre in Pretoria’s eastern suburbs.

Read: Proposed sale or auction of ‘tombstone mall’ thrown into disarray

Thumos Properties 1 was the developer of The Villa, which was promoted and marketed by Sharemax as a property syndication scheme.

The only asset owned by Thumos Properties 1 is a 70% undivided portion of the land on which The Villa has been built.

Nova subsidiary Villa Retail Park Investments owns the remaining 30%.

Read: Tshwane must reconnect electricity to sectional title units at Zambezi Retail Park

Option A in the business rescue plan proposed by Villa Retail involves its offer to acquire The Villa properties and complete construction of the mall subject to a number of conditions, including Villa Retail securing foreign investment to fund the completion of the mall.

Option B involves the sale of The Villa via a public or sheriff auction.

Read:
New draft offer received for The Villa ‘tombstone’ mall
‘Tombstone’ mall woes continue
Nova-controlled company wants to buy the ‘tombstone’ mall