Zimbali property developer scrambles to raise cash

No progress is evident at the R350m Zimbali Fairmont Hotel and Resort development, after chief contractor Liviero Building stopped work, as it is allegedly owed R18m by the client, IFA Hotels & Resorts (JSE: IFH). IFA officials are still not giving any statement as to their position but an architect working on the project confirmed that work has stopped.

Tim Harlech-Jones of RSL Architects (a subsidiary of DSA Architects international), a company that was working on the project, confirmed that its work had halted and it is waiting for a new contractor to come on board before it could recommence work. He said there were a variety of contractual issues that needed to be unbundled before a new contractor could be signed up. He did say that IFA was talking to some of the "big contractors," and was confident that the project would get off the ground soon.

Harlech-Jones admitted to an outstanding payment from IFA but said it was "a trivial amount" and that RSL Architects was still happy to service the client when the project gets back on track.

Alan Cooper, media liaison for Liviero also confirmed that work had not commenced on the site and said "the two provisional sentence matters before the PMB high court in which Liviero claims payment of approx R18m were part heard on November 4 and will be finalised on December 2."

He also said that the "the project is approximately 85% complete" and that the original completion date was May 4. He added that the project would need another six months before it is completed.

Calvin Wright, director and co-owner of Stefcon Projects, the other major contractor on site, said that he had completed all projects and had no money owed to it by IFA.

The rumour mill around IFA's financial situation continues to be fuelled with the latest news that certain properties on Boschendal Wine Estate are to be auctioned off by the Alliance Group on December 7. IFA is a joint owner of the property and speculation is that the property is being sold to alleviate a nagging R200m debt to Nedbank.

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