Creditors of former GMSA supplier lose big due to failed auction

Creditors of the liquidated Coega Autospray, which folded with General Motors SA’s (GMSA’s) exit from the country, stand to lose millions of rands as an auction to sell its assets to offset its debt raised far less than expected.

The auction was held this week, following the liquidation last month. A mere R1m was raised.

This was far less than the R33m million owed to the trustees of the Vumela Enterprise Development Fund - a financial institution that helps small and medium-sized enterprises.

Although the auction, held in Uitenhage, attracted close to 200 people, most of them were spectators.

Chris van Zyl, of accounting firm Mazars, one of the four provisional liquidators overseeing the Coega Autospray matter, this week expressed disappointment at the outcome of the auction.

“Bad. It went terribly. It was no way near what we expected. We expected double what we got, but just over a R1m was raised,” he told City Press.

A week before the auction, Van Zyl predicted that the bidding could attract between R4m and R5m.

Coega Autospray was started in 2001 and employed 79 people. It manufactured plastic trim components, mainly for GMSA.

Asked why the auction raised such a small amount, Van Zyl said: “It’s the sign of the economic times.”

However, everything on auction was sold. The items included automotive spray, an injection moulding plant, vehicles and trailers.

Contacted for comment, Vumela’s Andrew Buchanan said: “Obviously we are not happy with the outcome.”

He declined to elaborate.

Buchanan is head of Vumela’s post-investment management and filed the liquidation application on behalf of the creditors.