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Nationwide creditors to get no more than 22 cents for each rand owed?

1 May 2008. I just received 3 documents from Alta van Wyk at Tshwane Trust (the provisional liquidators of Nationwide Airline). One was the claim form and another was a requisition document. The interesting one was what they called "circular to creditors". I've printed out the full circular below, but the interesting bit for me is:

  • assets of R48m versus liabilities of R218m

I'm no liquidations expert, but at first sight it seems like creditors on average cant expect more than 22c for each rand they are owed:

  • this doesn't take into account liquidation costs.

  • this assumes that all creditors rank equally, which may not be the case (e.g. taxman, employees, liquidators' costs).

  • that those accounts receivable will be received.


We confirm that Nationwide Airlines (Pty) Ltd (Reg. No. 1989/000997/07), hereinafter also
referred to as “the Company”, was placed under provisional winding-up (liquidation) by an order
of the High Court of South Africa (Witwatersrand Local Division) , dated the 29th of April 2008.
The return date of the provisional order is set as the 10th of June 2008.
According to the Notice of Motion filed in the application for the winding-up, the financial
position of the Company, as at 31 March 2008, was as follows:
Property, Plant and Equipment R 12 619 278
Accounts receivable R 28 000 000
Other current assets R 7 392 568
R 48 011 846
Interest bearing borrowings R 14 930 935
Bank Overdraft R 10 000 000
Nationwide Air Charter R 60 000 000
Trade Creditors and other payables R133 000 000
R217 930 935
The following statement was released to the media by the CEO, Mr. Vernon Bricknell, on the
30th of April 2008:
“On the 7th November 2007, nationwide Airlines experienced an engine separation from a
Boeing 737-200 on departure from Cape Town.
Subsequent to this a protracted grounding of our fleet was mandated by the South African Civil
Aviation Authority.
In the months of December and January we resumed operations and attained a gradual
recovery of the business however in the months of March and April we faced a 30% increase
in fuel costs coupled with a decrease in passenger load factors.
Throughout this period we continued to work towards securing investment by a black
empowerment consortium which unfortunately has not come to fruition.
Our cash flow has become critical and as a result have decided to voluntarily cease all flight
operations until further notice.
The company was placed under Provisional Winding-up Order on the 29th of April 2008 and in
the hands of the Master of the High Court, Johannesburg. It is expected that the Master will
appoint a provisional liquidator or liquidators shortly who will take charge of the winding-up of
the company.
We apologize to our loyal customers for any and all inconveniences experienced.”
The Master of the High Court has appointed Ms. Du Plessis of our office as provisional
liquidator under certificate of appointment no.G400/08, dated the 30th of April 2008.
We are investigating the affairs of the Company and shall report to creditors as soon as more
information is available.
The provisional liquidator’s representative, Mr. JZH Müller, a director of Tshwane Trust Co, has
met with Mr. Vernon Bricknell on the May 2008. Mr. Bricknell has offered his full cooperation
with the provisional liquidators to find a buyer for the business of the Company, as a going
concern. Due to the public holiday and long weekend ahead, negotiations with potential buyers
can unfortunately not commence immediately.
A meeting has been scheduled to take place on Monday 05 May 2008 with the CEO, Financial
Director and Operations Manager of the Company.
We do however not foresee that the Company would recommence scheduled flights in the near
future and we suggest that passengers make alternative travel arrangements.
A database of creditors and passengers with possible claims against Nationwide Airlines is
being compiled.
Should the Company be placed under final winding-up, the provisions relating to the law of
insolvency and the Companies Act, no 61 of 1973, as amended, would apply and creditors will
need to submit claims for proof at a meeting of creditors.
For this purpose we enclose a set of claim forms to be completed. The original completed form,
together with substantiating documentation (for example a certified copy of your flight
ticket/voucher and proof of payment) may be returned to us via mail or delivered to our office.
We undertake to submit your claim for proof should and when it become necessary.
We also enclose a nomination form for the appointment of Mr. ML Ledwaba as provisional
liquidator as the Master of the High Court may decide to co-appoint additional provisional
liquidators in this matter. Mr. Ledwaba is a director of Tshwane Trust Company and also a
practicing attorney, well experienced in matters relating to insolvencies and liquidations. We are
of the opinion that it may be in the bests interest of creditors if Mr.Ledwaba is appointed as joint
provisional liquidator because of his experience and expert knowledge. The completion of this
form is voluntary and will not have an effect on your rights or your claim against the company.
The completed nomination form may be returned to us via fax.
We understand your frustration and possible anger under the current circumstances but we
endeavour to provide you with professional service and to keep you up to date with further
Yours faithfully

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