PROPERTY: Hardly The Cape's Property Pinnacle
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CAPE property enjoyed a fairly constructive year, but 2011 will also be remembered as the year that the ambitious Pinnacle Point Group went belly-up.
In November last year the Western Cape High Court granted a final liquidation order of Pinnacle Point, ending a sorry saga that has dragged down thousands of wide-eyed investors and trade union shareholders.
Certainly, some older readers may be reminded of the Masterbond debacle of the late eighties. Although it is early days in terms of what might be recovered from Pinnacle Point’s liquidation, shareholders would probably be prudent not to get their hopes up.
Ironically the liquidation application was brought by well known Cape Town businessman Sybrand van der Spuy, though his company Cape Point Vineyards.
The liquidation of Pinnacle Point leaves a number of developments in limbo, and it will be interesting to see if the liquidators can find buyers for individual projects.
The prices garnered for chunks of Pinnacle Point real estate may be telling, especially in relation to what was reflected in the last audited financial statements for Pinnacle Point.
As at February 2011, Pinnacle Point Group stated its tangible net asset value (that is to say physical assets like property) at nearly R600 million. When Pinnacle Point was suspended on the JSE – at a can’t-go-any-lower-price of 1c – the company carried a market value of only R83 million.
The liquidators’ biggest asset will be Pinnacle Point Golf and Beach Resorts near Mossell Bay. It must be considered the ‘flagship’ asset, and was already subject to discussions around a potential sale long before the liquidation application for Pinnacle Point Group.
What might be more fascinating to observe is whether van der Spuy – who, CBN understands, is not a major shareholder in Pinnacle Point – presses on with an official enquiry into the workings of the debt-laden group.
One has to remember that only a few years ago Pinnacle Point Group (or the old Acc-Ross group) held a market capitalisation that run into billions of rand.
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