Majola tea estate wound up

THE bankrupt Majola tea estate near Port St Johns was provisionally wound up in the Grahamstown High Court yesterday.

But its provisional liquidation may, according to court papers, pave the way for the provincial government to rescue the business, which has been broke and without any source of income for many years.

Sister tea estate Magwa – Magwa Enterprises Tea (Pty) Ltd (MET) – was placed under business rescue in February last year to give the provincial government time to put together yet another multimillion-rand rescue package.

The R116-million bailout package recently budgeted for by the provincial treasury was intended to save both Magwa and Majola.

However, Magwa business rescue practitioner Garth Voigt said, Majola could not be put into business rescue along with Magwa as its shares are held by the Majola Workers’ Trust, rather than by the Eastern Cape Development Corporation (ECDC).

The ECDC initiated Magwa’s business rescue proceedings but could not do the same on behalf of Majola.

But, Voigt said, it was still the province’s intention to rescue Majola with a large chunk of the R116-million. The plan now is to liquidate Majola to assess its indebtedness.

Voigt said he would then – in his capacity as MET’s business rescue practitioner – offer to buy the business for a nominal amount with a view to consolidating it with MET.

He said the business rescue plan being drawn up aimed to consolidate the two businesses with a single management.

The ruling was handed down by Judge Thamie Beshe. Attorney Mark Nettelton moved the application.

The estate will be finally wound up next month if there is no opposition to this.