Bleak outlook for creditors as Sails is officially liquidated

The burial went largely unnoticed, orations few, as SA Independent Liner Services (Sails), the ambitious South African-inspired dream to trade effectively between Europe and Africa in the face of heavyweight competition, was officially liquidated in the Cape High Court on December 1. FTW, more so than any other publication, has faithfully recorded the symptoms, diagnosis and demise of Sails after a scant few years, the post-liquidation process being more difficult than meets the eye. Darusha Moodliar, an insolvency specialist and director of Cape Town-based Sanek Trust Recovery Services, readily admits the Sails winding up is one of the most difficult she has had to deal with in 22 years of practice. “This was not easy, lots of cross-border insolvencies, maritime laws and the fact that some debtors are based overseas.” Final liquidation of a company does not mean it’s over and done with. “The Master of the Cape High Court has convened a meeting in Cape Town on January 29 to gather creditors’ claims, but the prospect of a dividend to them appears unlikely at this stage.” She says a ‘danger for contribution’ (rather than a dividend) would seem to be on the cards, indicative that costs already occurred in the winding up process exceed monies already collected. “So there will be a shortfall and it seems creditors will have to pay in, rather than collect.” Sails has no assets apart from a debtor book. Sanek has managed to recover a total of R1.4 million, from an initial R300 000, each debtor dispute being assessed on merit. The result of a top-level, twomonth audit into the company’s affairs is likely to be released at the end of this month. Moodliar also points out that any monies due to Sars will be secondary to those of the 12 or so Sails employees, followed by claims by concurrent creditors of which Lonrho tops the list. With a stake of around 8% in Sails, founder Ian Wicks is one of the largest shareholders (aside from Lonrho) but has already made clear to FTW he will be not be seeking any such relief, aside from overdue employee-related monies. Sanek received an approach to acquire Sails from a Durbanbased BEE concern well before the company’s winding up but Moodliar says she has neither had the time to follow up nor had any further contact from the party. She says it is not uncommon in insolvency terms for an approach to buy a liquidated company for the purpose of gaining from the ‘assessed loss’. “In order to benefit, one has to acquire a company with its assets, which would include the debt book.”