Court grants Magwa estate fifth extension

THE Grahamstown High Court has extended to July the business rescue process under way to resuscitate the beleaguered Magwa tea project near Lusikisiki.

In terms of the law, courts generally allow companies just three months in business rescue.

But this is the fifth extension sought by and granted to Magwa business rescue practitioner Garth Voigt, who faces the complex task of turning around a project that has faced disastrous and repeated failure since long before democracy.

Numerous large financial bailouts by the province have failed to turn the fortunes of the tea estate and processing plant, which has not produced significant amounts of tea since its heyday in the 1960s and 1970s. Despite this, it is the single biggest employer in the impoverished area.

Up until it was placed under business rescue in February last year, it produced almost no tea and governance and accountability were non-existent.

Provincial government has now provided a guarantee of a bailout of some R110million, which Voigt said in an affidavit had begun to trickle through.

Voigt said with an extension in place until July, he felt sure he could cement private investor interest and formulate a business plan.

Some 240 people were currently employed to establish the tea estate as a functioning entity, and this would likely escalate to 1 000 once the pruning process began.