Durban - SA Roadlink, the embattled bus company that has faced the wrath of traffic authorities countrywide for its fatalities and unroadworthy vehicles, is being liquidated after falling into debt of more than R22 million, court papers reveal.
This is despite the company’s chief executive, Allan Reddy, vehemently denying to the Daily News recently that the company was going under.
After failing to meet its escalating debts, the company was forced to apply for business rescue in 2013 and in June last year stopped its nationwide bus operations by closing its offices in Durban, Johannesburg, Cape Town, Pretoria, Port Elizabeth and Polokwane.
According to court papers filed in September in the Johannesburg High Court by rescue practitioner, Dawie van der Merwe, there “was no reasonable prospect for Roadlink to be rescued”.
He pleaded with the court to grant an order to discontinue the rescue procedure initiated by Reddy and place the company into liquidation.
In an interview with the Daily News three weeks ago, Reddy claimed the company had settled all its debts and he hoped that business would resume in April.
But according to Van der Merwe’s affidavit, SA Roadlink is commercially insolvent and unable to pay its debts.
Reddy did not respond to repeated telephone calls and SMSes from the Daily News on Friday and Sunday.
The company was unsuccessful in generating the R22.5m needed to keep it afloat, court papers show.
“The respondent (SA Roadlink) is also factually insolvent in that its liabilities by far exceeds its assets, fairly valued.”
Van der Merwe said the successful rescue of the company was dependent on the implementation of an adopted business rescue plan but there was no prospect of the company implementing the plan. Part of the rescue plan was that SA Roadlink was to pay SA Revenue Service R12m over 12 months beginning in August last year.
Court papers show that Reddy applied for business rescue because SA Roadlink failed to reach its financial obligations in terms of written lease agreements with Scania Finance between 2011 and 2012, First Rand Bank and Nedbank, to which it owed R2 679 384.
“From the outset of my involvement with the respondent it was clear to me that it would not be possible to rescue the business of the respondent by the development and implementation of a plan for the respondent to be able to exist on a solvent basis…” Van der Merwe said in his affidavit.
His business rescue plan was based on the ability of Roadlink to operate 23 buses on all the routes for which it had permits.
If it could not operate 23 buses he said, insufficient revenue would be generated.
Court papers show that soon after the business plan was adopted, three buses “burnt out” and another was involved in an accident.
Van der Merwe’s affidavit gave the company until August 22 last year to come up with the money and when it did not, he proceeded with the application to liquidate.
Daily News