Nungu Trading 472 (Pty) Ltd

(Under Provisional Judicial Management)

Masters Ref: T7649/09

better known as:

*The Heights (TUT)*

Holding Company:

Southern Palace Investments 335 (Pty) Ltd

 

Documents on File:

 

1. Notice of Motion

2. Court Order

3. Provisional Certificate of Appointment

 

THE HEIGHTS - TUT
NUNGU TRADING 472 (PTY)LTD
INCOME STATEMENT as from 17/11/2009 to 19/02/2010
INCOME			EXPENSES
Vacancy factor 0%
Monthly rental income November 2009	-		Operational Expenses November 2009	-
			Once off Expenses November 2009	-
				-
Monthly rental income December 2009	752,854.16		Operational Expenses December 2009	356,192.68
			Once off Expenses December 2009	-
				356,192.68
Monthly rental income January 2010	-		Operational Expenses January 2010	314,708.67
			Once off Expenses January 2010	47,252.88
				361,961.55
Monthly rental income February 2010	941,943.04		Operational Expenses February 2010	98,917.19
			Once off Expenses February 2010	133,699.29
			Once off Expenses - LDP Auditors (still to be paid)	26,575.20
				259,191.68
	1,694,797.20			977,345.91

 

1.      There is amount of R 1 320 337 owed to Bluezone Property Investments (Pty) Ltd (in liquidation) for a inter-company loan as determined by the forensic auditors.

2.      Bluezone Property Investments (Pty) Ltd (in liquidation) has a further claim for Rent Roll and Administration of R 958 582 against the company.

3.      The current account is held with FNB under acc number 62091294315 and is showing a zero balance. The Nedbank account is held under account number 901-591-8161 and has a credit balance of R 317 449.55

      as on the 1^st of March 2010.

4.      The property’s vacancy factor is 0% as on end February 2010.

5.      Total Immediate Obligations of the company : R 2 429 718.29

6.      Included in the expenses is an amount of R 150 799.29 which includes professional fees of forensic auditors, arrear taxes and legal fees.

7.      The property’s vacancy factor is 0% as on end February 2010. Note that there is NO fixed monthly rental

      on this tenant agreement. TUT determines the level of occupation of students on a monthly basis and pays

      rent accordingly. Therefore, during holiday breaks NO monthly income is paid as there is no student occupancy.

8.      No provisional judicial management fees have been charged or collected from the company, neither has the Master of the High Court granted any fees to be collect by the judicial managers as on date of this report.

 

Forensic Auditors’ Report Findings

The company was incorporated on 24 August 2005 under reference number 2005/029428/07.

The company’s registered office appears to be that of its auditor, Loubser Du Plessis Incorporated, and is given as De Waterkant Building, 10 Helderberg Street, Stellenbosch. Hennie Lamprecht is given as the sole director.

 

The company sole asset of significance is a student residence known as “The Heights” which is

leased to the Tshwane University for Technology until February 2012 and which it acquired in

June 2006 at a cost of R 26 000 000. The properties was valued by J.T. Seyffert in May 2006

for R 46 600 000 and formed the basis of a syndication arrangement by Bluezone Property Investments (Pty) Ltd (in liquidation) at a value of R 46 286 000.

 

Whilst the “Property Income Plan” refers to a purchase price of R 36 000 000, it appears that the purchase price was only R 26 000 000.

The profit excluded a commission payment of R 2 900 000 paid to Greenland Portfolio Inferno CC, in which a former employee of Bluezone, Paul Scheepers had an interest.

The commission payments represented 11.15% of the purchase price which appears grossly excessive.

 

It appears that an excessive fee of R 347 045 (excl VAT) was paid to Honey & Partners (the company’s attorneys).

 

THE ADMINISTRATION OF THE COMPANY POST SYNDICATION

 

The company has suffered from the under-recoverability of electricity and water, particularly since

July 2009. The company’s liability for electricity, water and refuse from July has averaged

R 318 000 per month (which approximates R 370 per student).

 

Should this trend continue (and together with the company’s liability for maintenance), we question whether the valuation placed on the property is realistic.

 

The company has rendered an income tax return up to the 2008 tax year. There is an estimated assessed loss for income tax purposes of R 2 598 000 at 28 February 2009.

 

FINANCIAL POSITION

·        The TUT property has been valued by Messrs of Valuers & Appraisers at R 45 975 000.

      This resulted in a write down in the carrying value of the property of R 4 554 000 after-tax.

      We believe that the under-recovery of electricity was under-estimated and therefore, we believe that the valuation may be high;

·        Property and administration expenses of R 958 582 have been accrued; and

·        The vacancy fund never existed and formed part of Bluezone’s funds from the commencement of the transaction.

 

The company’s liabilities exceed its assets by R 1 062 430 (based on Messrs of Valuers & Appraisers’ valuation) and is therefore insolvent.

 

CONCLUSION

 

The company faces a claim from the liquidators of Bluezone Property Investments of R 1 320 337 being the amount due to Bluezone on the intercompany account. The liquidators will most certainly pursue this claim.

 

back