Developments get new life
Former Pinnacle Point Group (PPG) shareholder and property development entrepreneur David Mostert has taken over two developments from the liquidators of the property development group before it faced final liquidation.
The properties are Wedgewood Golf & Country Estate in Port Elizabeth, owned by Wedgewood, and Romansbaai Beach and Fynbos Estate on the South Coast 180km from Cape Town, owned by Danger Point. Wedgewood and Danger Point are both PPG subsidiaries.
Prior to the liquidation process and before the developments were suspended pending further funding in 2010, R230m was spent developing Wedgewood and R60m was spent on Romansbaai.
However, as PPG started to collapse in 2010, both properties suffered and as a result all work on them had been in vain and the money had been wasted.
Mostert and partner Geoffrey McIver, through a new property holding company, Cardinet, purchased the shares and loan claims in respect of the two companies, Danger Point and Wedgewood, from PPG liquidators and successfully put both companies through business rescue.
The pair tapped into their own cash resources to finance the purchase.
Cardinet received the green light from the Western Cape High Court in January 2013 to take over the properties from the liquidators and carry on with their initially planned development. Mostert and his partner then raised some R30m to save the properties.
Wedgewood needed a cash injection of R17m to get it into operational shape. With the golf course having been com- pleted in December last year, 20 of 660 property stands in the estate, which sell from R565 000, have also already been sold.
In Romansbaai, 37 of 459 stands have been sold after R15m had been spent to revive the property.
Buyers in the ocean-facing estate include local investor supremo and Mostert’s and McIver’s personal friend Christo Wiese.
Attorney John Taylor, who headed the business rescue, told Finweek that had it not been for the intervention, both properties would have had to be auctioned, without their development rights and probably sold at a fraction of their fair value.
“Both properties are now in a much better position to be able to pay back their creditors,” Taylor says.
Looking back at what went wrong with