Mzi's R67.5m Zimbali development set to go under the hammer

CAPE TOWN - The property of Mzi Khumalo's company, Metallon Hotels & Leisure, is set to go under the hammer on April 21. Vans Auctioneers have confirmed that it has been instructed to auction the property and a date has been set but with Khumalo being granted leave to appeal against the liquidation it could be postponed.

According to Marco Dippenaar of Vans Auctioneers, the 4.8 hectare property has been valued at R67.5m and he already has a pre auction offer of R50m. With an estimated R27m worth of work already done on the site valuations of R100m for the property, partially built and sitting on the water's edge in trendy Zimbali, might not be far off the mark.

According to Dippenaar, the auction will go ahead assuming the court does not uphold Khumalo's appeal, but with Khumalo's track record with the courts buyers are licking their lips at the opportunity to acquire this prime piece of land. The development wing of the Tongaat-Hulett Group is also considering buying back the property if the price is right.

Khumalo's business was provisionally liquidated at the South Gauteng High Court on December 1 after Stefanutti Stocks served them with liquidation papers siting a non-payment of debt estimated at about R27m four years ago. Having finally run out of patience, Stefanutti have put Metallon to terms and the courts have agreed. It appears the appeal is a last throw of the dice for Khumalo's development, probably buying him time if not a reprieve. With additional costs plus interest the debt has grown to more than R39m.

The company's assets exceed liabilities by almost R60m. But if Khumalo is unable to raise the estimated R39m before the return date, the property will most likely be sold by Stefanutti Stocks to recover its losses.

Khumalo, once reckoned to be one of the richest men in South Africa is a former Robben Island inmate and Umkhonto we Sizwe operative. He was an early recipient of BEE empowerment riches and has gained infamy for his extravagant lifestyle and dubious accumulation of wealth. He made an estimated R1bn in a controversial deal with Harmony and has been in trouble with the Reserve Bank for shipping large amounts of money offshore. He also once hired the Aristotle Onassis yacht paying thousands of euros a day for its hire - but those lofty days might be over.

The Supreme Court of Appeal recently overturned a previous judgement handed down by a full bench of the Transvaal Provincial Division (TPD) in which Khumalo successfully challenged the seizure of his assets by the Reserve Bank.

Article by: Barry Washkansky - www.realestateweb.co.za