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STILL NO PAYMENT FROM 3 SUN HOTELS BUYER

08/08/2022 15:41:00 Kwanele Dlamini and Stanley Khumalo

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MBABANE – The sale of the three hotels under Sun International Management Limited has not gone through as the purchaser, Canham Mining International (Pty) Ltd, has not paid as per the Deed of Sale.

The sale agreement between Canham Mining International (Pty) Ltd and Manzane Estates Limited-Ezulwini Properties Limited in Liquidation, was signed in Matsapha and Sandton on May 24, 2022. The agreement was for the sale of SwaziSpa Hotel and Casino, Lugogo Sun and Ezulwini Sun, following the liquidation of five companies under Sun International Management Limited. It has been almost two and a half months since the sale agreement was signed. This publication has it in good authority that Canham Mining International (Pty) Ltd has not paid the seller, Manzane Estates Limited-Ezulwini Properties Limited in Liquidation, the 10 per cent deposit amounting to E78 260 157.10 and the purchase price in the sum of E782 601 571. According to Clause 4.2 of the Sale Agreement, Canham Mining International shall pay the deposit of 10 per cent of the purchase price not later than May 26, 2022. The amount was to be paid into a bank account of SwaziSpa Holdings and its subsidiaries in liquidation.

Breach

Should the sale be cancelled as a result of a breach by the purchaser, according to Clause 9.3, the parties agreed that 50 per cent of the deposit amount paid, and interest accumulated on it, shall be forfeited to the seller as a pre-estimation of damages. The clause further states that the other 50 per cent, with the interest accumulated on it, would be reimbursed to the purchaser within five days from the date of cancellation of the agreement by the seller. The agreement further states that Canham Mining International (Pty) Ltd shall, not later than 45 days from May 27, 2022, furnish the conveyancers with an unconditional and irrevocable bank guarantee in favour of SwaziSpa Holdings and its subsidiaries from a commercial bank registered in Eswatini for payment of the balance as approved by the seller. Forty five days from May 27, 2022 ends on Wednesday.

In Clause 9.5, the sale agreement states that payment of the purchase price shall be paid to the seller upon registration of ownership of the property into the name of the purchaser or before the purchaser should do so. Lawyer Nkosingivile Dlamini, who represents the liquidator, confided to this publication that the sale of the hotels did not go through as per the terms of the Deed of Sale. He said the liquidators were consulting with all the relevant stakeholders on a way forward. Dlamini was responding to a question from this publication which had sought to establish whether payment for the purchase of the hotels had been made of not, following concerns by some stakeholders that payment had not gone through.

According to a legal expert, a possible way forward in such a situation would be to re-advertise and reopen the bills. She said stakeholders in this matter, among others, included the seller, master of the High Court and the purchaser, who might have an explanation, for instance, to the effect that his money was held up somewhere but it had since become available. The expert also mentioned that creditors may be informed and engaged on the way forward. Among the bidders for the purchase of the hotels were Eswatini National Provident Fund (ENPF), Yeoman Properties, (PTY) Ltd, WZN Investments (Pty) Ltd and Africa Orbit Holdings (Pty) Ltd.

According to a report of the master of the High Court, compiled by the co-liquidators, Marisa Boxshall-Smith and Paul Mulindwa on April 22, 2022, the Creditors Committee ranked the bidders and on top of the list was Canham Mining International, followed by ENPF, Yeoman Properties, WZN Investments and Africa Orbit Holdings came last. Canham Mining International was granted a licence in 2016 to set up a thermal power station. The Australian company obtained the licence ahead of JSW Energy and its partners. For this project, Canham Mining International had proposed to invest E1 billion and create jobs for over 30 000 workers.

In papers filed in the High Court by the master of the High Court on March 18, 2022, the liquidator allegedly reported to the Creditors Committee that a sum of E1 billion had already been deposited into a South African bank account. The master of the High Court further reported that the liquidator also informed the committee that other potential purchasers had made offers of E934 million, E150 million and the liquidated companies had secured financing of E280 million. The sale of the hotels was previously disclosed by Assistant Attorney General (AG) Mbuso Simelane in court, where Sun International Limited was seeking the removal of Mulindwa as co-liquidator.

According to the sale agreement, Canham Mining International had also purchased immovable property from Manzane Estates Limited and Ezulwini Properties pursuant to the agreement.
The seller, as per the agreement, advised Canham Mining International of the sliver of land taken by the Eswatini Government for the purpose of the construction of the International Convention Centre (ICC).

Property

Manzane Estates Limited and Ezulwini Properties had also informed the purchaser that a Shongwe family resided on the property in an area close to Sfefanutti batch plant. The Shongwe family inhabits approximately five hectares of the land. It was also brought to the attention of Canham Mining International that there was a wall which encroached onto the property, opposite Royal Villas in Ezulwini. The purchaser was further told that the leases that were in place were verbal with an exception of Tinyosi Football Club, represented by Polycarp Dlamini, which was written and signed. The aforementioned agreement reportedly ended on May 31, 2022. Canham Mining International also agreed to pay a sum of E17 398 429 for the purchase of movable property within the three hotels.

In the agreement for the sale and purchase of movable property, the purchaser was informed that certain machines in Royal SwaziSpa belonged to a third party who had agreed to same being included in the sale. Canham Mining International was further informed that the Casino licence could neither be sold nor transferred and did not form part of the assets. The seller undertook to remove records belonging to the companies under liquidation prior to the registration of transfer of the immovable property to the name of the purchase. It was also part of the agreement that if the purchaser required the human resources records, the liquidator would first have a discussion with the union as well as with some of the individual employees who were not part of the union, regarding the release of their confidential information to the purchaser. It was further part of the agreement that all computers included in the sale would be formatted by the seller before the purchaser made any use of them.