Reddy to pay up, building to go on
Construction of the iconic R4.3bn Oceans Umhlanga development, delayed through legal wrangling over money, is expected to resume early next month.
Construction firm WBHO, which was suing developer Vivian Reddy personally for R35m for work already done but not paid for, has confirmed it has withdrawn the court action.
"A payment plan has been agreed and the court action has been withdrawn," WBHO's attorney Peter Barnard confirmed, after Reddy said the matter had been settled.
Reddy said this would pave the way for the construction of the mall and hotel - at a cost of R1.4bn - to proceed in the first week of June.
The court action was set down in the Pietermaritzburg high court for June 3.
"The contractor assured us they are truly committed to the success and completion of the project," Reddy said in an e-mail to Business Times.
The upmarket development was effectively shut down in October last year, with the company blaming the financial woes of two contractors, Liverio and Group Five.
In its court application, WBHO said that Reddy had stood personal surety in a "revised payment plan" for R75m that was owed to it and its joint venture partner, Sibonele Africa.
Because the amount had not been paid, WBHO had suspended work on the site late last year.
Two payments had been made - for R30m and R10m - but the balance of R34.4m, due on March 15, had not.
Barnard said, at the time, that WBHO did not want to scupper the project but "my client cannot keep carrying this debt".
Reddy had filed a notice to defend the court action.
Referring to "the perception that the R35m dispute could have led to him being sequestrated", he said in his e-mail to Business Times: "It's well known that due to my vast business interests in the casino, power and property sectors, that the amount of R35m is easily affordable given that I am developing a R4.2bn project which is the largest in SA and the biggest ever undertaken by a non-listed entity."
He said full funding for the development had been secured.