IN a shock move, Nelson Mandela Bay's premier five-star hotel, Radisson Blu in Summerstrand, has been placed under liquidation. Three years after the R330-million hotel's glitzy launch, Radisson has accrued "substantial debt", according to people linked with the company, which has led to the liquidation order.
The dire financial state of the business came to light yesterday after several Port Elizabeth-based suppliers attempted to recover payments.
The flagship asset of Port Elizabeth- based Auspex Hotels and Leisure, the Radisson was still trading yesterday despite an order handed down by the Port Elizabeth High Court last week placing Auspex under liquidation.
Shareholders said yesterday it was "business as usual" and that all the creditors would be paid.
Auspex Property was founded by Port Elizabeth businessman Ben Nyaumwe, whose company was the first local property group to have contracted one of Europe's largest hotel chains, the Rezidor Hotel Group, of which the Radisson is a brand, to Port Elizabeth in 2004.
Nyaumwe, who launched the swanky beachfront hotel in June 2009, resigned from Auspex's board of directors last year.
Joint provisional liquidators, led by Theodor van der Heever of Johannesburg-based D&T Trust, as well as Port Elizabeth attorneys Punithan Naidoo and Nash Vandayar, were appointed by the high court on Tuesday.
A communication from the hotel to creditors, which The Herald has seen, says "Auspex Hotels and Leisure has been placed under liquidation".
"The liquidation has been placed, and agreed upon by the main creditors, with express instruction that the company will be continuing as a going concern, with effect 24 August 2012," the document reads.
This was confirmed by Vandayar, who referred The Herald to D&T Trust for more details on the liquidation.
"I do not have all the details with me now and this situation is still in progress, but I can confirm that it is business as usual for the hotel," Vandayar said.
"What is happening is that the predicament is being managed. There are lots of technical aspects and these are being managed right now."
Messages left for D&T Trust's Van der Heever were not returned.
However, a Bay property developer familiar with the crisis, who did not want to be named, said he believed that "inappropriate financial dealings" were a catalyst in the liquidation.
The 18-storey hotel caused a stir when it was built on the beachfront in 2009.
Auspex Hotels and Leisure, according to the company's website, is one of four subsidiary companies under parent company Auspex Property, which includes Auspex Property Development, Auspex Project Solutions and Auspex International Realty.
These combined employ more than 170 staff, according to the website.
Auspex Property's first major project involved what was described as an upmarket apartment building on Brookes Hill overlooking the city's beachfront and another development called The Pearls.
Vandayar said as far as he was aware, the liquidation would affect only the Radisson and not any other assets or concerns within the group.
Nyaumwe, the former managing director of Auspex Property, said yesterday that after resigning from the hotel's board last year, he held no interests in the company.
"This has nothing to do with me. I don't want to make any comment on this," he said.
Leading Port Elizabeth businessman Phil Gutsche, who has an "interest" in the property on which the hotel is situated, said last night it was "business as usual" at the company.
"It is a good business and it is very much business as usual there.
"Everyone [creditors] will be paid and the business will continue," Gutsche said.