Watt Energy, a major player in the massive multibillion-rand Tsitsikamma Community Wind Farm (TCWF) project, has been wound up.
A massive falling out between directors and a debt of more than R19-million to one of its partner companies led to the company’s downfall.
Watt Energy is central to the R2.9-billion wind farm project being built on land owned by the amaMfengu community at Wittebosch near Clarkson.
The amaMfengu, who had lived in the Tsitsikamma area for more than 140 years, were uprooted from the beautiful coastal area by the apartheid regime in 1977 and forced to settle in the barren Ciskei.
They were granted back their ancestral land after 1994.
Late former struggle activist and Nelson Mandela Bay councillor Mike Mcebisi Msizi, who was born in the area, started Watt Energy and drove the renewable energy project that also aimed to benefit the impoverished local community.
He died in 2012 but his wife, Nomthandazo Msizi and son, Litha, inherited his 70% of the shares in the company. Msizi’s business partner Mark Scheepers held the remaining 30%.
The wind farm, which will consist of some 31 wind turbines, was predicted to be operational by late 2016.
It aimed to generate some 95MW of electricity, enough to power 80000 households.
It was at the behest of Watt Energy’s majority shareholders, the Msizi family, as well as its project partner, energy company Cennergi, that Watt Energy was liquidated.
Cennergi has a 75% stake in the TCWF, Watt Energy a 16% stake and the Tsitsikamma Development Trust 9%.
Watt Energy’s function was limited to the holding of shares and shareholder loans in the TCWF.
According to court papers, TCWF was funded by way of a bank loan of approximately R263-million as well as by shareholder contributions in proportion to their shareholdings.
Watt Energy could only make its equity contribution via a multimillion-rand loan from its partner Cennergi in 2013.
In terms of the agreement, Cennergi would pay Watt Energy’s equity contribution directly to TCWF.
All Watt Energy was obliged to do was furnish Cennergi with its signed and audited financial statements within 60 business days of its financial year-end or face cancellation of the loan agreement.
But according to court papers business relations between Scheepers and the Msizis became so strained the company became virtually dysfunctional.
It could not even produce its audited financial statements, so Cennergi cancelled the loan agreement and demanded instant repayment of some R19-million.
In two separate applications, Cennergi and the Msizis then asked the High Court to wind up Watt Energy, which Judge Jeremy Pickering granted this week.
He said the relationship between Nomthandazo and Scheepers had broken down to the point that the management of the company had been rendered dysfunctional.
On this fact alone it should be liquidated.
He also agreed with Cennergi’s submission that Watt Energy was factually insolvent and unable to meet its liabilities to TCWF or Cennergi.
Top wind farm firm wound up
A massive falling out between directors and a debt of more than R19-million to one of its partner companies led to the company’s downfall.
Watt Energy is central to the R2.9-billion wind farm project being built on land owned by the amaMfengu community at Wittebosch near Clarkson.
The amaMfengu, who had lived in the Tsitsikamma area for more than 140 years, were uprooted from the beautiful coastal area by the apartheid regime in 1977 and forced to settle in the barren Ciskei.
They were granted back their ancestral land after 1994.
Late former struggle activist and Nelson Mandela Bay councillor Mike Mcebisi Msizi, who was born in the area, started Watt Energy and drove the renewable energy project that also aimed to benefit the impoverished local community.
He died in 2012 but his wife, Nomthandazo Msizi and son, Litha, inherited his 70% of the shares in the company. Msizi’s business partner Mark Scheepers held the remaining 30%.
The wind farm, which will consist of some 31 wind turbines, was predicted to be operational by late 2016.
It aimed to generate some 95MW of electricity, enough to power 80000 households.
It was at the behest of Watt Energy’s majority shareholders, the Msizi family, as well as its project partner, energy company Cennergi, that Watt Energy was liquidated.
Cennergi has a 75% stake in the TCWF, Watt Energy a 16% stake and the Tsitsikamma Development Trust 9%.
Watt Energy’s function was limited to the holding of shares and shareholder loans in the TCWF.
According to court papers, TCWF was funded by way of a bank loan of approximately R263-million as well as by shareholder contributions in proportion to their shareholdings.
Watt Energy could only make its equity contribution via a multimillion-rand loan from its partner Cennergi in 2013.
In terms of the agreement, Cennergi would pay Watt Energy’s equity contribution directly to TCWF.
All Watt Energy was obliged to do was furnish Cennergi with its signed and audited financial statements within 60 business days of its financial year-end or face cancellation of the loan agreement.
But according to court papers business relations between Scheepers and the Msizis became so strained the company became virtually dysfunctional.
It could not even produce its audited financial statements, so Cennergi cancelled the loan agreement and demanded instant repayment of some R19-million.
In two separate applications, Cennergi and the Msizis then asked the High Court to wind up Watt Energy, which Judge Jeremy Pickering granted this week.
He said the relationship between Nomthandazo and Scheepers had broken down to the point that the management of the company had been rendered dysfunctional.
On this fact alone it should be liquidated.
He also agreed with Cennergi’s submission that Watt Energy was factually insolvent and unable to meet its liabilities to TCWF or Cennergi.
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