Proud Heritage 131 (Pty) Ltd

(Under Provisional Judicial Management)

Masters Ref: T7653/09

better known as:

*Chambers 1*

Holding Company:

Wellvest 17 (Pty) Ltd

 

Documents on File:

 

1. Notice of Motion

2. Court Order

3. Provisional Certificate of Appointment

 

 

CHAMBERS 1
PROUD HERITAGE PROPERTIES 131
INCOME STATEMENT as from 17/11/2009 to 19/02/2010
INCOME			EXPENSES
Vacancy factor 55%
Monthly rental income November 2009	-		Operational Expenses November 2009	-
			Once off Expenses November 2009	-
				-
Monthly rental income December 2009	148,184.12		Operational Expenses December 2009	34,358.37
Double payment - Eon			Once off Expenses December 2009	-
				34,358.37
Monthly rental income January 2010	74,092.06		Operational Expenses January 2010	167,050.03
			Once off Expenses January 2010 (loan repayment)	4,466.59
				171,516.62
Monthly rental income February 2010	-		Operational Expenses February 2010	53,709.17
			Once off Expenses February 2010	122,211.33
			Once off Expenses - LDP Auditors (still to be paid)	25,433.30
				201,353.80
	222,276.18			407,228.79

 

1.                  There is amount of R 232 600 owed to Bluezone Property Investments (Pty) Ltd (in liquidation).

2.                  Bluezone Property Investments (Pty) Ltd (in liquidation) has a further claim for Rent Roll and Administration of R 181 013 against the company.

3.                  The company’s arrear levies have been reduced from R 287 018 to R 94 127.48 since date of the

            judicial management order.

4.                  The current account is held with FNB under acc number 62088187474 and is showing a zero balance. The Nedbank account is held under account number 901-591-8200 and has a credit balance of

            R 8 181.34 as on the 1^st of March 2010.

5.                  The property’s vacancy factor is 55.27% as on end February 2010.

6.                  The company’s arrear tax liability at 30 November 2009 is R 12 433

7.                  Total Immediate Obligations of the company : R 642 384.81

8.                  The company’s current monthly income amounts to approximately R 65 500 with expenses of

            R 70 000 per month EXCLUDING the bond repayment of R 80 000 per month.

9.                  The bond account is held with Nedbank under account number 30082593 with an outstanding balance

            of R 3 220 524.97 as on the 7^th of January 2010. The bond payment is R80 313.82 per month. The bond is paid up to date.

10.             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 8 April 2005 under reference number 2005/010853/07. 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 and Johan Willem van der Spuy are given as the directors of the Company.

 

The company sole asset of significance are certain sectional title units situated on the 1^st floor of a office complex known as Tyger Valley Chambers 2, Bellville which it acquired in October 2005 at

a cost of R 10 502 258. No valuation by J.T. Seyffert could be found on record, but the property was syndicated by Bluezone for  R 12 152 000. The balance represented Bluezone’s profit on syndication gross of marketing commissions, transfer costs, etc.

 

THE PROPERTY SYNDICATION

 

The investment was geared to the extent of a mortgage bond by Nedbank for R 6 000 000.  The balance of the funding requirement of   R 6 152 000 was intended to be provided by a loan from the company’s holding company and ultimately by investors. Eventually an amount of R 7 898 800 was procured from investors and the bond reduced to about R 4 000 000.

 

THE ADMINISTRATION OF THE COMPANY POST SYNDICATION

 

The company has suffered from having Bluezone as a non-performing tenant. Bluezone vacated the premises in July 2009. No replacement tenant has been found, and there are no viable prospects at the date of this report, with the result that 55% of the premises is currently unlet.

 

On August 2008, the company contributed an amount of R 180 000 to Honey & Partners towards settlement of a dispute with TBA Genomineerdes. Honey & Partners has to date not accounted

to the company for the amounts dispersed. The amount is carried as a current asset in the books of the company, but the recoverability thereof remains uncertain.

 

The company has rendered an income tax return up to the 2008 tax year. There is an amount due against the 2008 assessment of R 12 433.

 

FINANCIAL POSITION

 

·        The Chambers 1 property has been valued by Messsers of Valuers & Appraisers at

      R 10 500 000. This resulted in a write down in the carrying value of the property of

      R 2 419 790, after tax,

·        Unpaid property and levy expenses of R 287 018 have been accrued, and

·        Provision has been made for a rent collection and administration fee of R 181 013,

      payable to Bluezone.

 

In the absence of any subordination agreement by the Holding Company, the company’s liabilities exceed its assets by R 839 911 (based on Messrs Valuers & Appraisers’ valuation) and is therefore insolvent.

 

Furthermore, with the property 55% unlet, the company is unable to meet its mortgage loan repayment and normal operating costs, nor meet its immediate obligations at its current rental income level.

 

 

CONCLUSION

 

At present, the company is unable to meet its mortgage loan commitments in full, but is not in arrears, nor make any contribution towards its normal operating costs.

 

The company is similarly unable to pay its levy and other arrears of  R 287 018 as at 30 November 2009.

 

In addition thereto, the company faces a demand from the liquidators of the Bluezone insolvent estate for repayment of a loan by Bluezone, amounting to R 232 600.  The forensic auditors have c

oncluded that the company is unable to pay its debts. 

 

As there are no immediate prospects of finding a new tenant, nor of raising fresh capital from investors, and it is  recommended that the property be put on the market immediately, failing which, the Judicial Managers should consider liquidating the Company, as the Company cannot be restored to profitability.

 

  

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