On Monday (15 June), creditors of liquidated Choice Technologies – who are collectively owed about R108-million – will be asked to decide on whether Convergenet Holdings should be allowed to buy up the company instead of letting the liquidation proceed.
Creditors are being asked to consider a scheme or arrangement whereby Covergenet would pay off the liquidators, then settle a portion of creditors' claims by collecting the debtors' book, contributing a capital sum and realising some of the company's assets.
Should creditors agree to the arrangement, the liquidation order on Choice Technologies would be set aside and Convergenet would acquire its entire share capital. Convergenet would continue with Choice's operations and contracts, backdated from the date of the original liquidation.
If the creditors agree to the arrangement a receiver would be appointed, who would draw up a liquidation and distribution account, as it he were winding up the company, and make over final payments to creditors.
As part of the deal, Convergenet Holdings would pay the liquidator R3,12-million rand if the arrangement is accepted.
In addition, Convergenet would pay over R3,88-million to the receiver, who will also have the R27,88-million realised from Choice Technologies assets.
The proposed arrangement would see creditors receiving about R23,778-million towards the money they are owed.
In a memorandum to creditors, Convergenet Holdings urges them to consider the arrangement as it would allow non-secured creditors to receive some dividend, as opposed to none if the liquidation were to go ahead.