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Thursday Jul 24, 2014

Rescue plan for Blythedale property development

The two main players in the failed Blythedale Coastal Resort (BCR) project - the community and eLan Properties, headed by businessman Mark Taylor - are considering a fresh partnership to develop the R10 billion upmarket housing estate on the North Coast.

Speaking outside a meeting of creditors and investors in the BCR project at the Durban Country Club yesterday - where a business rescue plan was approved which will see most being paid out in full - community representatives confirmed they were talking to three potential developers 'but eLan is the only one we are taking seriously'.

Taylor confirmed that talks with the Zwelabantu Dube Community Property Association were ongoing to resurrect the development, which was once labelled a blueprint for integrated housing and land reform.

'The trust between us is still there, which is nice. Potentially, our proposal to the Dubes is to develop and manage the land on their behalf. We have been talking all along,' he said.

Musa Dube, spokesman for the community, said it had appointed ENS attorneys to assess the legality of Taylor's proposal and agreed that talks were ongoing.

'There are a few changes that we are looking at. I am not sure when we will make an announcement on our decision,' he said.

Creditors and investors applauded after approving the business rescue plan, which will see R357 million being paid out to those owed money by BCR, with the land handed over to the community 'clean of all debt' with its development rights.

The company was placed into business rescue to stave off possible liquidation after the community went to court in 2011 seeking to pull out of a deal it had signed with Taylor, giving it a 20 percent stake in what was expected to be a lucrative project in return for the land.

The community had complained that Taylor had not fulfilled his promises, the project was taking too long and the government was wrong to sanction the deal.

Taylor blamed the lack of development on the economic slump and on the community, which was refusing to approve any development loans. The government intervened and sided with the community.

A negotiated settlement was made an order of court, essentially giving the community the land and development rights, in return for which the government would compensate BCR by R322 million.

It is this money - sitting in an attorney's trust account - which is to be divided between creditors, including those who paid money for sites, professionals who performed work, trade creditors, contractors and the biggest creditor, Taylor's Blue Coast Developments (formerly eLan).

At yesterday's meeting, chaired by business rescue practitioner Ken Stewart, almost all the creditors voted either in person or by proxy with only two voting against.

One was contractor Teichmann Plant Hire, owned by former rugby star Gary Teichmann, who has claimed R8.5 million for earthworks done on 'Millionaire's row'.

He was at the meeting but declined to speak to The Mercury.

A source said he was pursuing the claim as a 'breach of contract' rather than one of money owed.

Stewart assured the meeting that his claim would be 'ring fenced' and would be negotiated.

The only other 'nay' vote came from Nkosinomusa Buthelezi who, according to the list of creditors, had not put in a claim but was listed under 'loans and options' for R300 000 plus interest.

There were few questions raised and most attendees expressed satisfaction that the process had been fair, transparent and successful.

The Mercury


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