Acap­ulco Trade and Invest, the BEE part­ner at Lanseria Air­port, was last month paid more than R400m by the Pub­lic Invest­ment Cor­por­a­tion (PIC) in a move that is said to have incensed the board, which is now con­tem­plat­ing legal action to recoup the funds.

At the heart of the mis­giv­ings by the board is that the valu­ation of Lanseria was grossly over­stated by some R1.7bn, open­ing the door for Acap­ulco to walk away with the hefty set­tle­ment in a situ­ation where it ought to have walked away with little, if any­thing.

According to Business Day, the epis­ode raises fresh ques­tions about how the PIC gov­erns com­plex private sec­tor recov­er­ies and comes less than five years after the Mpati Com­mis­sion found wide­spread gov­ernance fail­ures at the fund.

Acap­ulco in 2013 received a R333.2m loan from the PIC to buy a 25% stake in Lanseria.

Under the terms of the deal, Acap­ulco was expec­ted to use reas­on­able com­mer­cial endeav­ours dur­ing the term to raise funds to refin­ance a por­tion of the cap­ital loan amount.

The final repay­ment of the cap­ital loan amount was the 10th anniversary of the first advance date, which came in the lat­ter part of 2023.

Business Day reports that Acap­ulco defaul­ted on the loan, which had bal­looned to about R600m, includ­ing interest. The PIC then moved to per­fect its secur­ity by tak­ing trans­fer of Acap­ulco’s shares in Lanseria.

The PIC and Acap­ulco hired pro­fes­sional ser­vices firm BDO to con­duct the valu­ation.

The draft valu­ation was rejec­ted by both parties, with BDO’s man­date ter­min­ated in Octo­ber 2024. A month later, the parties appoin­ted Crowe to con­duct the valu­ation.

Crowe in Janu­ary pro­duced its final report, which the PIC dis­agreed with.

Crowe’s valu­ation was an out­lier in that it was far removed from his­tor­ical valu­ations of the asset.

The PIC’s view is that Crowe’s valu­ation inflated the value of Lanseria by about R1.7bn. 

The valu­ation put Acap­ulco’s stake in Lanseria at about R1bn, open­ing the door for the com­pany to walk away with a tidy sum, even after los­ing its shares to the PIC over the R600m debt.

Full Business Day report