Metcash loan secures 1 500 Seven Eleven jobs
June 20, 2003
By Ronnie Morris
Cape Town - About 1 500 jobs were secured yesterday when provisional liquidation orders for the Seven Eleven Corporation and Seven Eleven Africa were discharged in the Cape high court.
The companies control the 100 company-owned stores as well as about 170 franchised stores, which together employ 1 500 people.
Nedbank called up its overdraft early in April and by agreement proffered a notarial general bond over Seven Eleven stock the following morning. As a result, the companies had to apply for voluntary provisional liquidation a day later.
After intense negotiations yesterday, George Hadjidakis, the owner of the franchise, undertook to pay creditors R90 million, which would settle their claims in full and provide for R6.75 million in respect of the provisional liquidators' fees.
Hilton Gischen of law firm Mallinicks confirmed Hadjidakis would pay creditors and the provisional liquidators' fees in full.
Metro Cash and Carry (Metcash), which in May confirmed that it had bought the Seven Eleven franchise, undertook to advance the money to Hadjidakis as a loan.
Initially the undertaking to pay creditors did not include liquidators' fees and most of the day was spent in talks with counsel
.
Hadjidakis was grateful to Metcash for the confidence it had shown in the brand.
"Without them there would have been a hostile takeover of the business. Staff, creditors and suppliers would have been at risk.
"It was a win-win deal and Metcash will do well. During negotiations it was an absolute condition that creditors be paid 100c in the rand," Hadjidakis said.
Gavin Woodland, senior counsel for the liquidators, told acting justice Barbara Gassner it was imperative the companies be discharged from provisional winding up.
Not only would staff be irreparably prejudiced but the liquidators had no further recourse to funding. Creditors were no longer prepared to fund the firm, he said.
Should the order not be discharged, it would be the "death knell" of the company, he said.
Brendan Manca, counsel for Seven Eleven, told the court Metcash would pay Seven Eleven creditors as at the date of liquidation.
The Metcash deal was contingent on the discharge of the provisional liquidation and approval by the Competition Commission.
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