One of Nova Property Group’s service providers has filed liquidation applications against the holding companies of six of its shopping centres – a move that, according to Moneyweb, could have serious consequences for former Sharemax investors.

It notes that if Nova, the entity responsible for repaying these investors (who became debenture holders in terms of the Sharemax rescue scheme), is placed under provisional or final liquidation, all outstanding debentures would become immediately due and payable. 

Liquidation would also allow for a comprehensive investigation into the events that led to the group’s financial collapse and the conduct of its directors and other key stakeholders. 

Bright Light Solar (BLS), a company that installed solar systems at several Nova shopping centres, filed the liquidation applications. It claims Nova owes it more than R4m in unpaid electricity bills and R80m in penalties for contractual breaches.

It further alleges that Nova acted in bad faith and has abused legal processes to delay payment. 

'Given the respondent’s clear inability to pay its debts and its repeated attempts to delay enforcement, liquidation is the only appropriate remedy,' BLS CEO Kevin Shames claims in court papers.

'The respondent has repeatedly employed procedural tactics to evade its obligations, and the court should not permit further obstruction.'

Nova chair Connie Myburgh claimed BLS’ applications are 'vexatious, opportunistic and without merit'.

'The applications are an abuse of legal process, launched merely for the sake of embarrassing and extorting the Nova Group.’

Myburgh also stated that the Nova companies claim more than R80m in damages from BLS.

'Notwithstanding the above disputes and damages claims, Bright Lite Solar (sic) deemed it appropriate to issue liquidation proceedings in a totally inappropriate manner, and merely as an extortive defence mechanism.'

He also stated that the liquidation applications do not render debentures payable. However, Moneyweb notes that if the Nova companies are indeed placed into provisional or final liquidation, the debentures will become immediately payable.

It says this is specified in the Nova Debenture Trust deed, which forms part of the Schemes of Arrangements that tasked Nova with repaying former Sharemax investors.

Full Moneyweb report