Reg Rumney
The investment of around 3 000 debenture holders in the troubled Owen Wiggins Trust group is still at risk.
For the first time since March 9 the curators of Owen Wiggins, whose troubles bear similarities to the Masterbond saga, have formally contacted investors.
The curators, in a circular dated September 29, have poured cold water on the hopes of a rescue operation
The circular has a little good, and a lot of bad, news for investors.
The curators say participation mortgage bond investors have already been repaid around R5,8-million, and the curators expect to be able to repay another R7-million soon.
However, most of the remaining bonds are problem bonds where legal proceedings have been instituted to recover money, and where sales in execution and liquidations of several mortgagors seems inevitable.
Participants in the bond granted to Knightsbridge Village (Pty), which recently went into liquidation will sustain big losses, say the curators.
Plans to restructure the group cannot go ahead, say the curators, without:
* Accurate financial statements, reflecting the true value of the all the companies in the group. The curators say, for instance, that the debtor book is overstated.
The curators say that at June 30, 1993, shareholders’ equity in the consolidated financial statements of Owen Wiggins Securities, the company that raised debentures to finance Port Owen Marina and the Langebaan Country Club, was overstated by R25-million. Accordingly, the company appears to have been insolvent then.
* The settlement of a claim by Absa, the largest creditor, of some R20-million. A proposal to swop the debt for the island at Port Owen has fallen through.
* An injection of capital.
* Reasonable certainty that investors will benefit.
Proposals to restructure are based on the flawed premise that debentures be converted to timeshare rights, say the curators. Timeshare is hard to convert to cash and entails levies, which could be substantial.
The curators further state that the R35-million founder Owen Wiggins says the Langebaan property can achieve as a casino is unlikely to be more than R9- million.
Meanwhile, the serviced plots at Langebaan and Port Owen have been revalued and property broker Pam Golding is marketing 73 plots at Langebaan with a total value of around R4-million.
Advertising and promoting of the properties is due to begin this weekend.
Owen Wiggins could not be contacted at the time of going to press.