De­vel­op­ments get new life

Finweek English Edition - - COMPANIES & INVESTMENTS -

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

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