Two offers for 70% of ‘tombstone’ mall

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29-08-2023
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Moneyweb
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Negotiations are taking place with the BRP of building contractor GD Irons Construction.

Two offers have been received by the business rescue practitioner (BRP) of GD Irons Construction for the building contractor’s right to a 70% shareholding in the properties on which The Villa ‘tombstone’ mall in Pretoria has been built.

BRP Etienne Naude said on Monday he is still negotiating the terms and conditions with the two bidders.

He was not prepared to disclose the identity of the bidders but confirmed that neither offer was from Villa Retail Park Investments, which owns the remaining 30% in The Villa and has a disputed claim to a further 50% in the half-built derelict mall.

Naude said he has not heard from Villa Retail Park Investments chair Connie Myburgh since a meeting of affected persons earlier this month to vote on the business rescue plan of Thumos Properties 1 (Pty) Ltd, the developer of The Villa.

Option C in the plan was approved at the meeting.

Three legs

George Nell, the BRP for Thumos Properties, said last week there are three legs to Option C, one of which is that GD Irons Construction takes over the assets of Thumos for the value of the firm’s security.

Claims by GD Irons Construction against Thumos valued at almost R600 million have been accepted by Thumos’s BRP.

Nell stressed that all three legs to Option C included the claim by Villa Retail Park Investments for a further 50% of The Villa.

This claim is based on a disputed sale of business agreement between Villa Retail Park Investments and Thumos Properties in 2011.

Nell said the second leg of Option C involves a 21 business day window in which he could accept other offers for R350 million plus transfer duties or Vat for Thumos’s 70% shareholding in The Villa properties.

He said Villa Retail Park Investments can also make an offer for the 70% shareholding – though the offer must be acceptable to GD Irons Construction and the company’s BRP – for R350 million plus Vat or transfer duties.

Option A in the Thumos business plan, which was not passed by the meeting of affected persons, involved an offer by Villa Retail Park Investments for the 70% shareholding in The Villa for R200 million but was subject to a host of conditions, including securing financing.

Nell said Villa Retail Park Investments or another external bidder has until 7 September 2023 to make an offer for the 70% shareholding in The Villa.

‘Big stride’

Nell, who was appointed BRP of Thumos for two years, claimed: “We have made a big stride in the right direction. At least there will be some kind of clarity shortly.

“We don’t know what is going to happen with the development, but surely it must end somewhere, and it has moved in a positive direction.

“At least a set of rules is in place,” he said.

Myburgh threw down the gauntlet after the Thumos meeting and told Moneyweb the vote that carried “was inappropriate” and any attempt by the BRP of Thumos to procure the transfer of the 70% undivided share of The Villa mall related properties “will be interdicted by Villa Retail”.

He said Villa Retail has an indisputable right to receive the transfer of a 50% undivided share of the Villa Mall-related properties, and “this right will be pursued vigorously”.

“It is impossible for GDI [GD Irons Construction] to obtain transfer of the 70% undivided share of the Villa Mall-related properties while the above right of Villa Retail exists,” he said.

Naude said after the meeting there were investors interested in purchasing the 70% interest now that GD Irons Construction will be taking transfer of 70% of the land on which The Villa has been built.

He said he will be bringing an application to court to “say this marriage between GD Irons and Thumos and Myburgh’s company Villa Retail are at loggerhead[s] and apply for the appointment of a receiver to sell the 30% [owned by Villa Retail]”.

“My investors, who already own 70%, will then buy that 30% on auction. That is the way forward,” he said.

Court action

Naude confirmed on Monday that he is still progressing with the high court application, but that if there is a successful buyer of the 70% shareholding, he wanted to make the buyer a co-applicant in the court action.

“So yes, it’s definitely on the cards [the high court application]. I haven’t abandoned it.

“We are working very hard to finalise that [the sale] so that we can move forward with that application,” he said.

Moneyweb emailed a list of questions to Myburgh last week about Villa Retail Park Investments’ plans following decisions taken at the meeting.

He said: “Villa Retail cannot discuss its planned actions with the media. This would be inappropriate.

“Unfortunately, Villa Retail cannot entertain your questions,” he said.

GD Irons Construction was appointed to build The Villa by Thumos, whose only asset is 70% ownership of The Villa.

GD Irons Construction has a lien over the properties on which The Villa has been built because of non-payment by Thumos for work done and last year obtained a high court judgment ordering Thumos to pay it R249.4 million for unpaid costs incurred in the building of The Villa.

With interest, this claim now amounts to almost R500 million.