Breathing space for Magwa Tea rescue

The Grahamstown High Court has granted a sixth extension to the 29-month long business rescue process under way to resuscitate the state-owned Magwa tea project near Lusikisiki.

In terms of the law, courts generally allow companies just three months in business rescue. But Magwa business rescue practitioner Garth Voigt faces the incredibly complex task of turning around a government business project that has faced disastrous and repeated failure over more than two decades, despite repeated government bailouts to the tune of hundreds of millions of rands.

For the first time in decades, there seems to be light at the end of the tunnel for the 70-year-old tea project.

Voigt says the impoverished community are starting to enjoy the benefits of employment offered by a functional business for the first time in ages.

The tea estate was laid to waste in 2011 by employees whose wage increase demands could not be met by the floundering project.

Voigt said it remained in a state of neglect till 2015.

The idea was to rehabilitate the tea estate at the cost of the state and then find private sector participants to take up equity in it and introduce the necessary capital, skills and resources to realise its potential by growing both tea and other sustainable crops in the fertile area.

Despite several hiccups caused by the state not providing promised funding in time, the tea estate by the end of March had produced a crop of 376 tons of tea.

But Voigt says the estate is not yet in a position where it could be regarded as rehabilitated or self-sustainable and fit to be placed in the hands of a board of directors.

He said the inclusion of the similarly decrepit and even more remote Majola Tea Estate near Port St Johns in the rehabilitation process had retarded progress and necessitated the extension.

Attorney Mark Nettelton moved the extension application on behalf of Voigt. The application was not opposed.

Judge Templeton Mageza extended the rescue to April.