Nova unable to repay former Sharemax investors
The Nova Property Group is in a desperate financial position and is unable to repay its debenture holders – former Sharemax investors – anytime soon, if ever.
The group’s most recent annual financial statements reveal that it faces a desperate cash flow challenge and a property portfolio that has been slashed.
However, the Nova board – under the leadership of chair Connie Myburgh and CEO Dominique Haese – believes the firm is in a ‘sound financial position’ and can continue as a going concern.
The statements reveal that despite receiving R24m in cash from the sale of the Athlone Mall, Nova burned through the cash at an alarming rate and only had R4.4m in the bank at the end of February.
Over the past five years, Nova realised R31m in cash through property sales but only returned R50.4m to debenture holders.
Neither Myburgh nor Haese responded to Moneyweb questions.
However, in the directors’ report in the AFS, the board has ‘satisfied themselves that the group is in a sound financial position and that it has access to sufficient resources to meet its foreseeable cash requirements’.
Jean-Pierre Tromp, the trustee of the Nova Debenture Trust, said the AFS reveals a company not in a healthy financial position.
The report notes that Nova may soon lose its two Nelspruit properties, Courtside and The Village Mall, as they have already been seized by the sheriff and are set to be auctioned off to repay bridging finance provider Beneficio.
The auction has been stayed pending Nova’s appeal to the SCA for leave to appeal against the High Court judgment authorising the auction.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.