NELSPRUIT – When the regional radio station, MPowerFM faced liquidation in 2012, it was decided that a business rescue would be suitable, thereby ensuring a dividend for creditors and the survival of the company.
It may have saved the radio station, but remains an expensive process according to the final liquidation and distribution account that was made available on February 3. Creditors could object until Monday February 24.
Mr George Nell, the business-rescue practitioner in this instance, earned nearly R700 000 for 18 months of work, with another R400 000 grossed by other attorneys and accountants involved in the process, including local practitioner Mr Braam van Rensburg.
A so-called “success fee” of 2,5 per cent on any saving that Nell was able to negotiate, was agreed on by MPowerFM as well as all creditors, according to Van Rensburg. The concurrent claim by 29 creditors amounted to nearly R13 million, with R3,5 million allotted. This is an allocation of 27,24 cents to the rand.
“There are several enquiries from stakeholders regarding the liquidation and distribution account, and an amended one should be presented after negotiations,” said Van Rensburg. He foresees that payments to creditors are made within seven to 10 days.
He is confident that the case has been “a great success” and could serve as a case study for how a succesful rescue operation should proceed.
Avoiding liquidation ensured an initial cash injection of R6 million from Times Media Group (TMG), for a 65 per cent share in the company which held, as its most valuable asset, a broadcasting licence. The licence would have expired in the event of liquidation. According to the agreement, TMG will invest another R12 million to ensure sustainable operations.
“With this transaction, we have not only saved the business, but preserved a minority share for the initial local shareholders group,” declared Van Rensburg.
Outstanding salaries to staff of more than R2 million have been paid since October 2013, which included an approximate amount of R192 000at the time to station manager , Mr Mark Schormann, who stated that his aim was to save the station and remaining staff, which has now been accomplished. Shareholders received just under R200 000.
TMG will relaunch the station with a new name and look in March, according to the new general manager, Mr Tony Mallam. Listeners who have missed the “rhythm of Mpumalanga” will be able to tune into the same frequency at 94.3 to hear familiar as well as some new voices.
Read a previous article, published a month after the station went off the air for a second time.
