New draft offer received for The Villa ‘tombstone’ mall

A new draft offer has been received for The Villa, the half-built derelict shopping mall in Pretoria’s eastern suburbs that was promoted and marketed by Sharemax as a property syndication scheme.

This has contributed to the second postponement of the Section 151 of the Companies Act meeting of affected persons of Thumos Properties 1 (Pty) Ltd, previously named Capicol 1 (Pty) Ltd, which developed The Villa.

Read: The Villa: Decision on future of ‘tombstone’ mall delayed

The first meeting of affected persons held on 15 May 2023 to determine the future of Thumos Properties 1 –  and ultimately also the future of The Villa– was adjourned until Friday 9 June 2023.

The only asset owned by Thumos Properties 1 is a 70% undivided portion of the land on which The Villa has been built.

Draft offer considered

George Nell, the business rescue practitioner (BRP) of Thumos Properties 1 (Pty) Ltd, told Moneyweb on Monday he has received a draft offer  for The Villa from David Pieterse, which he is still considering.

Pieterse was previously on the team with Paul Kyriacou that 12 years ago planned and started construction of The Villa.

Kyriacou is the former managing director of Capicol and the sole director of Thumos Properties 1 while Pieterse was previously listed as a director of Capicol.

Nova-controlled company wants to buy the ‘tombstone’ mall

Nell did not provide any details about Pieterse’s offer but confirmed he is “considering a possible amendment to the business rescue plan should it [the Pieterse offer] be able to stand the test of time in my view”.

“The David Pieterse offer is still being considered and negotiated and thus not in a format to be distributed at this stage,” Nell said.

“So I am postponing the meeting until June 28 on the basis that it is necessary and expedient to do so.”

Legal opinion

Nell added that he is also still awaiting a legal opinion from senior counsel on the validity of the claims of Villa Retail Park Investments (Pty) Ltd.

Villa Retail Park Investments is a subsidiary of the Nova Property Group, the rescue vehicle of the failed Sharemax property syndication schemes, and owns the remaining 30% of The Villa.

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However, Villa Retail claims it is entitled for the transfer of a further 50% undivided share of The Villa in terms of a settlement agreement entered into in 20211 with Thumos Properties 1. The settlement agreement was subject to the payment of certain amounts and the fulfilment of several obligations by Villa Retail, which it claims it has met.

This dispute is the subject of ongoing litigation.

Damages claim rejected

The business rescue plan revealed that Nell had rejected Villa Retail’s claim of R1.3 billion that emanates from Thumos Properties 1 allegedly causing such damages to Villa Retail.

However, Nell said when the business rescue plan was published that these claims “could however be accepted or afforded a voting interest after obtaining the legal advice”.

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GD Irons Construction, which was contracted to build The Villa and has a lien over the properties on which the mall has been built, was the only secured creditor in Thumos Properties 1 when the business rescue plan was published.

This means GD Irons Construction currently has the sole right to determine which option, if any, in the business plan is accepted.

Interest accrued

GD Irons Construction has claims valued at almost R600 million accepted by the BRP, the largest of which relates to the High Court order the company obtained last year in terms of which Thumos Properties 1 was ordered to pay the company R249.4 million for unpaid costs incurred in the building of The Villa.

With interest, this claim now amounts to almost R500 million.

The Thumos Properties 1 business rescue plan contained two options but indicated that there was a possibility of a third option, Option C, which was a pending proposal from Pieterse.

Nell said when the business rescue plan was published that the possible Option C will need to be considered by the BRP and affected persons alike, prior to the commencement of the meeting in terms Section 151 of the Companies Act.

Read: Sharemax ‘tombstone’ may soon be under the hammer

Option A in the business rescue plan, proposed by Villa Retail, involves its offer to acquire The Villa properties and complete the construction of the mall, subject to several conditions.

These conditions include Villa Retail securing foreign investment to fund the completion of the mall.

Option B involves the sale of The Villa via a public sheriff auction.