Correction: A previous version of this Fin24 article erroneously claimed court papers had been filed for the liquidation of both Afro Voice — formerly the New Age newspaper, and Afro Worldview — formerly known as ANN7. This is incorrect. The liquidation application only applies to Afro Voice.
Businessman Mzwanele Manyi has filed court papers seeking an order of liquidation to be granted for media business Afro Voice, formerly known as the New Age newspaper.
According to an affidavit filed at the Pretoria High Court on July 11 by Manyi — in his capacity as director of Afrotone Media Holdings and executive chairperson of TNA Media — the media company TNA is commercially insolvent.
“There are no prospects of rescue for the company under the prevailing circumstances,” the affidavit read. Manyi and several other directors have asked for the court to grant liquidation to protect the interests of its creditors and some stakeholders.
TNA owns Afro Voice (New Age) and Afro Worldview (ANN7). Last year, Manyi bought the media companies from the Gupta family’s Oakbay Investments after the big four banks closed Oakbay’s accounts. TNA’s financial position declined due to a lack of operational capital, so Manyi stepped in to save jobs at TNA, he said in the affidavit.
“At the time of the acquisition, the applicants and I had reason to believe that we would be able to regain confidence in the market place and afford TNA Media the opportunity to recover financially and become financially profitable as it used to be,” he said.
When Manyi bought the company in August 2017 it was operating at a loss of R4.57-million. In September 2017 the company’s revenue increased from R4.959-million to R5.565-million, which Manyi said was due to improved market optimism.
But this did not last, between November 2017 and February 2018 revenue declined as a result of dwindling advertising business. Manyi attributed it to the festive season during which the primary client base, government and parastatals, did not advertise.
Between February 2018 and June 2018 revenue declined further from R5.173-million to a mere R255 650. This was mainly due to declining advertising revenue, the Free State and North West provinces had also cancelled their bulk subscriptions and the TNA Business Briefings on which the company relied as another revenue stream was suspended indefinitely.
Other businesses also ended their relationships. Westdawn Investments did not review their annual advertising commitment of R1.7-million per month, after the contract ended on February 28 2018. An annual sponsorship commitment by the Koornfontein Mines for the TNA Business Briefings also ended.
The negative perception of its previous owners, the Guptas, persisted which also negatively impacted the company’s financials, Manyi explained in the affidavit.
“Despite the applicants’ best endeavours to distance the respondent from its past, lingering perceptions that the respondent was still linked to its former owners unfortunately remained.”
The negative perception and continued decline in revenue saw accumulated operational debt in June 2018 come to over R23-million.
Further, TNA Media’s operational bank accounts were held at VBS Mutual Bank, which was placed under curatorship in March. Operations were negatively impacted due to the freezing of accounts, Manyi said.
Manyi said that he and other directors had tried to restore the company to its “former glory”. For one, he had settled the vendor financing with Oakbay Investments. “I specifically expressed the hope that the aforementioned settlement would finally put to rest any suspicions of lingering involvement of either Oakbay or the Gupta family and provide much needed market confidence.”
The rebranding of ANN7 and the New Age was also introduced to sway perceptions.
But these efforts were not enough — the decline in government advertising, the canning of TNA Business Briefing and increasing operational costs had weighed down the company’s financial position.
“The respondent [TNA Media] is currently commercially insolvent without viable or sustainable prospects of being rescued from its dire financial position,” said Manyi.
The matter is to be heard in court on July 24. — Fin24