Publications
- African People Mover applied to the court on Monday to have its business rescue application heard on an urgent basis.
- Standard Bank and Mercedes-Benz each opposed the business rescue application as an intervening applicant.
- While APM officer Venesa Sigwebedlana argues the company can be saved, she says Standard Bank and Mercedes want it wound up to secure their debt.
African People Mover (APM) crossed paths with major companies Standard Bank and Mercedes-Benz at the North Gauteng High Court in Pretoria on Wednesday over the fate of a struggling long haul bus service.
APM applied to the court on Monday to have its business rescue application heard on an urgent basis.
The hearing on business rescue was originally meant to be heard in September, but APM's human resources administration officer Venesa Sigwebedlana said the company is bleeding cash fast.
However, Standard Bank and Mercedes-Benz each filed papers opposing the business-rescue application as an intervening applicant. Mercedes-Benz exposed to APM and Standard Bank secured and financed assets for APM, including the business' coaches.
APM, like many long-distance travel businesses, has been rocked by the Covid-19 pandemic which began last year and has kept South Africa in a business-crippling lockdown ever since.
APM was founded in 2014 to service the long-distance bus market. In that time, APM has created more than 200 direct jobs and generated nearly R700 million in revenue.
The court application, which Fin24 has seen, states that Standard Bank and Mercedes-Benz wish to stop the business-rescue process from going ahead and want APM to be wound up altogether.
Creditors will 'ride into the sunset'
But after Mercedes-Benz and Standard Bank intervened, the National Empowerment Fund Trust stepped in, arguing that the business-rescue process could assist APM with getting back in shape and continuing with business.
"Curiously, both Standard Bank and Mercedes-Benz in their papers have not only chosen to rubbish the new proposed strategic direction of APM, but have also abrogated themselves the role of the credit committees of SEFA [Small Enterprise Finance Agency] and the NEF," the application states.
According to the court document, secured creditors have exposure to APM, with Standard Bank exposed by a carrying value of R18 million and debt of R18.2 million.
"Should the decision go the way of Standard Bank and Mercedes-Benz, they will ride into the sunset with their secured assets, leaving behind a trail of destruction for employees and unsecured trade creditors," the application argues.
Mercedes-Benz is exposed with a carry value of R14.3 million and debt to the order of R11.1 million. Trade Creditors is exposed by R38 million including R16 million in disputed access fees that the Passenger Rail Agency of South Africa (Prasa) has raised for accessing Park Station.
The disputed access fees raised by Prasa are currently the subject of Competition Tribunal case, the court document notes.
"Perhaps the real irony is the single-mindedness of the commercial lenders' refusal to play their part in an economy that is shedding millions of jobs.
"The calls for everyone to join hands in reversing the economic mess we all are in have definitely fallen on deaf ears in Rosebank and Zwartkop," the court document stated.
The court document said the current operating model, which was not unique to APM, was subject to the vagaries of seasonal demand and prone to negative effects, all of which are outside the control of the company.
"These range from taxi interference, lack of regulations enforcement, anti-competitive behaviour by Prasa, favouritism by OEMs or banks and, more recently, [the] Covid-19 lockdown fallout," the document said.
The SA Revenue Service and the Companies and Intellectual Property Commission are named as respondents in the application as the expectation is on them to provide guidance and save jobs at the long-distance bus service provider.
