Coega Autospray has become the first casualty of General Motors SA’s (GMSA) decision to leave South Africa after the Port Elizabeth High Court granted an application to liquidate the company yesterday.
The application was driven by Vumela Enterprise Development Fund Trust after it emerged that Coega Autospray owed the investment firm more than R33-million.
Judge Gerald Bloem granted the application.
The move could see up to 80 people losing their jobs at the Uitenhage company.
GMSA announced in May its decision to shut its Port Elizabeth operation.
In an affidavit submitted by Vumela’s head of post investment management, Andrew Buchanan, it was claimed Coega Autospray had failed to take corrective steps to pay back investment funds paid out since 2011.
Funding was provided in terms of a convertible loan agreement with stringent repayment terms set out.
According to Buchanan, Vumela’s account system showed Coega Autospray was technically insolvent with total liabilities amounting to R57-million while its total assets added up to about R45-million.
A manufacturer of plastic trim components for the automotive industry, primarily for GMSA, Coega Autospray opened its doors in 2001.