FINANCIALLY troubled property company Pinnacle Point Group will have its Lagos Keys project in Nigeria, whose value is estimated to be R398m, terminated as it cannot raise funds to develop the venture, lawyers representing its liquidators said yesterday.
The Lagos state government earlier in the month sent a letter to the property group stating it intended to terminate the company’s land ownership and development agreement due to an alleged breach of terms. It gave the group 30 days to remedy the breach, failing which the agreement would be terminated.
In 2009, the company’s unit, Pinnacle Point West Africa, signed an agreement with the state government to develop a luxury leisure destination. But since the agreement was signed, not a single sod of soil has been turned.
Instead, Pinnacle Point Group is now under liquidation in SA and the subject of an inquiry into its business affairs.
The liquidators’ representatives said as the company did not have any money it would be impossible to complete the deal.
"There’s no prospect whatsoever of resuscitating the Lagos Keys project," said Edward Nathan Sonnenbergs director Leonard Katz.
He said liquidators would investigate the nature of the alleged breach, to understand but not rescue the deal.
The Lagos Keys project was seen as a key asset with the potential to rescue Pinnacle Point from its financial woes. It had been forecast the project could generate about R500m in three years if it were developed.
Investors who stand to lose substantially from the demise of Pinnacle Point include workers aligned to the Southern African Clothing and Textile Workers Union. They had R260m of their pension money invested in the company’s shares, which are now worth 1c.
Banks have lent the group’s units more than R200m, and have admitted that the likelihood of total recovery is minimal.
Pinnacle Point shares are suspended from trading on the JSE and the company faces being delisted from the exchange.