Nic Georgiou fails to transfer buildings worth billions.
JOHANNESBURG - A plan by apparent property billionaire Nic Georgiou to repay R4.6bn to about 18 000 investors has got off to an inauspicious start. Nine months into the plan, Georgiou has failed to transfer properties worth billions of rand to provide security to investors.
The rescue plan is for eight syndication schemes sold by Pickvest (formerly PIC Syndications). These syndication companies were placed under business rescue late last year. Investors accepted a proposal by Georgiou to repay them after five years. See: R4.6bn Pickvest rescue hinges on property billionaire.
Georgiou and his family own property jewels such as the Fourways Mall, Cedar Square, and Loch Logan Waterfront in Bloemfontein.
As part of the rescue plan, Georgiou was supposed to transfer properties worth billions of rand to a public company called Orthotouch. This would provide investors with some security should Georgiou fail to meet his obligations.
However, nine months after the rescue plan’s adoption, most, if not all, of the properties have not yet been transferred into Orthotouch’s name.
Orthotouch legal adviser Theo Koutsoudis has declined to comment on the failure to transfer properties. Says Koutsoudis: “I confirm that I am at this stage not authorised to divulge any information suffice it to state that the Business Rescue Plan is proceeding despite efforts to derail the process by persons pursuing their personal agendas.”
Moneyweb can also reveal that valuable properties that were supposed to be transferred to Orthotouch have been sold. The proceeds of these sales amount to more than R400m. Some of the larger properties sold include: Southdale Shopping Centre for R175m; 1 Centex Close, Sandton for R99m; Pembury Lodge for R45m; Safeside, Mpumalanga for R15m; and 5-7 Main Road, Melville for R13m.
Koutsoudis has similarly declined to comment on what money from the sales of the above properties was used for.
There has also been a shakeup at Orthotouch board level. Chairman Jannie Nel recently had his services terminated. Nel declined to comment on his departure from Orthotouch.
Nel’s departure leaves Orthotouch with four directors: Nic Georgiou, Panos Kleopvoulou, Hans Klopper and Connie Myburgh.
Under the rescue plan, Georgiou, through Orthotouch, promises to pay investors in the syndication companies a reduced monthly income for five years. At the end of the five-year period, Orthotouch promises to repay investors their full R4.6bn. See: Pickvest: Billionaire gets five years to repay investors.
The success of Orthotouch will depend on the directors’ ability to increase the net value of its property portfolio to R4.6bn after five years. Inflation will assist the directors with this task but will also erode the value of the final payment to investors.
There is a concern that by selling the buildings mentioned above, Georgiou is eroding the total value of the assets that are pledged to Orthotouch, reducing the likelihood that their net value will ever reach R4.6bn.
Prior to publication a copy of this article was sent to Koutsoudis. He was invited to correct possible factual errors and offer any comment he may have. Koutsoudis responded:
Dear Julius
Your draft article is fraught with inaccuracies and innuendos. Your quote from my email states clearly that the Business Plan is proceeding. It follows that all funds are being utilised in terms of the Business Plan. Your statement that "Koutsoudis has similarly declined to comment on what money from the sales of the above properties was used for" is clearly therefore inserted purely for sensationalistic reasons.
Neither I nor the Board are prepared to make any further comments at this time, and certainly not within the time you stipulate.
All our rights are reserved.
Yours sincerely
Theo Koutsoudis
