CORRECTION: Mzwanele Manyi files for liquidation of ex-Gupta paper, not broadcaster
Correction: A previous version of this article erroneously reported that court papers had been filed for the liquidation of both Afro Voice - formerly the New Age newspaper, and Afro Worldview - formerly known as ANN7.
This is incorrect. The liquidation application only applies to Afro Voice.
Businessman Mzwanele Manyi has filed court papers seeking an order of liquidation to be granted against newspaper Afro Voice, formerly known as the New Age.
Manyi told Fin24 on Tuesday morning that the newspaper Afro Voice and the TV station Afro Worldview are separate entities, and the liquidation application only applies to the newspaper.
According to an affidavit filed at the North Gauteng High Court on July 11 by Manyi, in his capacity as director of Afrotone Media Holdings and executive chairperson of TNA Media, the media company TNA Media is commercially insolvent.
“There are no prospects of rescue for the company under the prevailing circumstances,” the affidavit read. Manyi and several other directors have asked for the court to grant liquidation to protect the interests of its creditors and some stakeholders.
TNA Media owns Afro Voice.
Last year Manyi bought the New Age newspaper and the TV channel ANN7 from the Gupta family’s Oakbay Investments after the big four banks closed Oakbay’s accounts. TNA Media's financial position declined due to a lack of operational capital, so Manyi stepped in to save jobs at TNA, he said in the affidavit.
“At the time of the acquisition [of TNA Media), the applicants and I had reason to believe that we would be able to regain confidence in the market place and afford TNA Media the opportunity to recover financially and become financially profitable as it used to be,” he said.
When Manyi bought the New Age in August 2017 it was operating at a loss of R4.57m. In September 2017 the company’s revenue increased from R4.959m to R5.565m, which Manyi said was due to improved market optimism.
But this did not last, between November 2017 and February 2018 revenue declined as a result of dwindling advertising business. Manyi attributed it to the festive season during which the primary client base, government and parastatals, did not advertise.
Between February 2018 and June 2018 revenue declined further from R5.173m to a mere R255 650. This, said Manyi in his affidavit, was mainly due to a combination of declining advertising revenue, the Free State and North West provinces cancelling their bulk subscriptions, and the TNA Business Briefings - on which the company relied as another revenue stream- being suspended indefinitely.
Other businesses also ended their relationships. Westdawn Investments did not review their annual advertising commitment of R1.7m per month, after the contract ended on February 28, 2018. An annual sponsorship commitment by the Koornfontein Mines for the TNA Business Briefings also ended.
The negative perception of its previous owners, the Guptas, persisted which also negatively impacted the company’s financials, Manyi explained in the affidavit.
“Despite the applicants’ best endeavours to distance the respondent from its past, lingering perceptions that the respondent was still linked to its former owners unfortunately remained."
The negative perception and continued decline in revenue saw accumulated operational debt in June 2018 come to over R23m.
Further, TNA Media’s operational bank accounts were held at VBS Mutual Bank, which was placed under curatorship in March. Operations were negatively impacted due to the freezing of accounts, Manyi said.
Manyi said that he and other directors had tried to restore the company to its “former glory”. For one, he had settled the vendor financing with Oakbay Investments. “I specifically expressed the hope that the aforementioned settlement would finally put to rest any suspicions of lingering involvement of either Oakbay or the Gupta family and provide much needed market confidence.”
The rebranding of both ANN7 and the New Age was also introduced to sway perceptions.
But these efforts were not enough - the decline in government advertising, the canning of TNA Business Briefing and increasing operational costs had weighed down the company’s financial position.
“The respondent [TNA Media] is currently commercially insolvent without viable or sustainable prospects of being rescued from its dire financial position,” said Manyi.
The matter is to be heard in court on July 24.
*Update on Tuesday 17 July at 12:26: This article has been updated to reflect the fact that court papers have been filed for the liquidation of only Afro Voice - formerly the New Age newspaper - and not Afro Worldview - formerly known as ANN7. Fin24 apologises for the error.
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