Choice liquidator sets deadline

By Nicola Mawson for Choice Technologies

Johannesburg, 25 Jun 2009

Choice Technologies may still be liquidated if no deal is struck to save it before Tuesday, says the liquidator.

Although there are now two interested parties who want to bail out Choice through a scheme of arrangements, one process has halted as the company has not yet signed, and the other has only just indicated its interest, says Deon Botha, from Corporate Liquidators.

If a deal is not inked before next month, the liquidation will proceed, which will result in staff losing jobs and creditors being paid out very little, adds Botha.

Black-owned Choice Technologies was placed under liquidation last year, after a R2.8 million dispute, which Square One claims is owed to it by Choice.

JSE-listed Square One Solutions Group obtained the liquidation order, through subsidiary Structured Infrastructure Solutions (SiS), against Choice.

Saving jobs

Initially, ConvergeNet had indicated it would take the company over through a scheme of arrangements that would see staff retain jobs and creditors at least being paid out something. However, last week the company said it was no longer going ahead with the plan.

Choice's creditors are believed to be owed about R100 million, and the scheme may see secure creditors being paid out, staff retaining jobs, the South African Revenue Service receive R5 million out of R15 million owing, and other creditors 4c in a rand.

Operations at Choice would also continue. However, should the matter proceed to liquidation, staff would be without work and creditors would be more out of pocket. Choice management has said it is too early to comment and the company would rather speak when the deal is successfully concluded.

It is understood the dispute between the companies arose from an attempt by Square One to take over a 49% stake in Choice, held by the National Empowerment Fund, as well as the remainder of the interest, held by the Choice Group. The initial deal was discussed in April/May last year, and received board approval from Choice.

Choice CEO Semela Tseka said, at the time, that Square One had purchased 100% of SiS - a company that was often subcontracted by Choice to do cabling for customers.

“Square One Solutions then used SiS to put in a claim against Choice for work done on our behalf and monies which they claim were owed to them. The monies they claim are owed to them are in dispute by us, as the work by them was not completed,” he said.