EBundu placed under business rescue
MBOMBELA - They had a turnover of R5.5m in the past seven months and currently have more than R1m cash in the bank.
Despite these arguments tabled by Ntombizodwa Tshabalala and her husband, Albert, the owners of eBundu Lodge, before the high court in the city, Judge Henk Roelofse placed the establishment under business rescue (BR).
The application against the Tshabalalas came after they had neglected to pay more than R340 000 per month back to the Industrial Development Corporation (IDC).
In 2018, when the Tshabalalas bought a majority share in the hotel, formerly known as Bundu Lodge, they took out a loan of R32m from the IDC. These funds were earmarked to among others pay out the then owner, Willem Janson, an amount of R5.5m.
Janson currently still holds a 33.3% share, with 66.7% belonging to the Tshabalalas.
During the application for business rescue against the lodge, Cebo Nzuza, a senior legal adviser at the Department of Legal Recoveries, Business Rescue and Insolvencies of the IDC, said despite the lodge’s efforts to stop the application for BR, it is clear that they cannot pay the amount of R27m currently owed to the IDC.
eBundu also owes the City of Mbombela more that R3m in rates and taxes. They also earlier had to make an agreement with SARS to settle their outstanding taxes.
Documentation presented in court shows the lodge’s income for the first seven months of 2022 was R5.5m.
Their operating expenses amounts to R5.9m. Nzuza said this left them with a nett loss of around R370 000 (or R56 000 per month).
He said the Tshabalalas’ objective by trying to stop the BR is simply for them to continue being in charge of the lodge and no one else, not even an independent party appointed by the court.
“If eBundu was self-sufficient as the deponent claims, it would not seek a six months’ reprieve or alternative source of funding,” Nzuza said.
He also told the court the claim by the Tshabalalas that a BR plan would “cut eBundu at the knees” is not correct.
“The more this is delayed, the more this asset will reach a point at which it can no longer be rescued. To the contrary, eBundu will enjoy the statutory moratorium that will afford it a breathing space to turn things around.”
In her response, Ntombizodwa, who is the CEO of eBundu, claims the lodge is currently indeed doing financially well enough not to be placed under BR.
Roelofse ruled that Phahlani Mkhombo be appointed as interim business rescue practitioner and that the IDC’s legal team should sign all documents and forms in order for eBundu to implement the court order.
In October last year, the Tshabalalas appeared in court on charges of fraud amounting to R50 000. The charges related to fraudulent invoices Albert had submitted to eBundu Lodge. He was convicted on all three charges, but his wife was acquitted. He has yet to be sentenced.