Cape Town jazz festival saved
By Karen Breytenbach
The Cape Town International Jazz Festival has been saved by an out-of-court settlement of R6,5-million.
The festival's Cape Town-based events management company espAfrika has settled its loans with its former partner Mojo Works BV of the Netherlands.
In response to Mojo's application on April 15, the Cape High Court had accepted that the efforts of the Dutch over several years to get espAfrika to honour its debts had failed, and granted an order to provisionally liquidate espAfrika.
The Capetonians had until May 27 to settle or be liquidated.
They will no longer have to return to court.
On Monday espAfrika settled a debt of R3.7m accrued between 2001 and 2003, as well as an additional R2,8-million loaned during 2004. This amounted to a "full and final settlement of R6,5-million", according to espAfrika chief executive Rashid Lombard.
espAfrika and Mojo were formerly partners in staging the North Sea Jazz Festival in Cape Town. Mojo founded the North Sea Jazz Festival in the Netherlands 30 years ago. espAfrika this year decided to go solo and rename the local event the Cape Town International Jazz Festival.
"We are quite relieved this whole thing is over and everything can go back to normal," Lombard said on Tuesday.
Mojo's spokesperson, Dick van Zuijlen, said from their offices in Amsterdam they were satisfied with the outcome: "We are indeed very pleased that espAfrika at the last moment discovered reserves which enabled them to repay the amounts due to Mojo.
"We do regret that we were forced to go to court. However, we felt that this unfortunate step had to be taken. It followed logically from our repeated requests for a settlement proposition since July 2004. The timing of these events, therefore, had nothing to do with the dates of this year's jazz festival."
Van Zuijlen said Mojo was very proud to have contributed to the founding of a high-profile jazz festival in Cape Town.
On Tuesday Lombard said that they could repay their Mojo debt because Rocklands Investment had loaned them the money.
Wentzel Oaker, an advocate, heads Rocklands, and is the new chairperson of espAfrika.
"We have been given an opportunity to restructure financially.
"How we position and value the festival from now on will be crucial for attracting the right local strategic partners," said Lombard.
The festival's organisers plan to make use only of local strategic partners in the future, he said.
"We're hoping for a bigger buy-in from the City of Cape Town.
"We believe the festival is owned by the people of South Africa, and not merely espAfrika. It would have been a great loss to Cape Town and indeed the whole of South Africa, had we not been unable to repay our debt or go ahead with the next year's festival," said Lombard.
According to Lombard statistics gathered during the 2003 jazz festival showed an economic impact on Cape Town of over R65-million.
According to Oaker the dispute was never the repayment of the debt, but merely the timing of repayment: "The irony pertaining to the provisional order was that espAfrika was never not in a position to pay its creditors, and as a company, never ever required the use of a bank overdraft facility to fund its operations."
Lombard added that although the festival had not shown a profit until 2005, espAfrika had not considered a bank overdraft until the recent threat of liquidation.
Had Mojo waited for the 2004 festival's audit to be completed by July, the full financial status and viability of the joint venture could have been determined.
The provisional liquidation had, however, forced espAfrika to "decide in good faith on a full and final settlement and (to) bring the relationship to a final close", said Lombard.