The iconic Theo’s Superspar in Otjiwarongo (TRJ’s Trading Enterprises Close Corporation) is on the cusp of closure after the Spar Group instituted urgent legal proceedings to take control of some of its assets, Business Express can reveal.
Documents seen by Business Express show that TRJ’s Trading Enterprises Close Corporation trades as ‘Theo’s Superspar’, ‘Theo’s Tops’, and ‘SaveMor Orweto’.
In their main claim, the Spar Group notes that Theos Spar is indebted to the applicant in the amount of N$41,466,824.15 (excluding interest), which amount is currently due, owing, and payable by the respondent to the applicant.
In essence, owners of Theo’s Spar allegedly owe the Spar Group N$38,126,905.08 in respect of the Superspar, N$1,782,815.23 in respect of the trading activities of ‘Theo’s Tops’ and N$1,927,745.22 for ‘SaveMor Orweto’.
“This indebtedness relates primarily to the balance due, owing, and payable in respect of stock sold and delivered on credit and ancillary services rendered by the applicant to the respondent” the group states in documents filed with the High Court.
The Group says that Theo’s Spar has been bankrupt since Covid and the death of its owner in 2023. To get back the money that is owed, the Group is trying to get permission to take possession of Theo’s Spar’s movable property in order to complete its general notarial bonds with registration numbers BN6109/2012, 81528/2012, 84640/2019, and 82791/2022 (the GN8s) registered over the movables.
BACKGROUND
The Spar Group is a wholesale distributor of goods and services for independently owned ‘SPAR’, ‘TOPS’, and ‘SaveMor’ stores. The Group provides products and ancillary services to retailers such as Theo’s Spar. Retailers, including Theo’s Spar, typically enter into a membership agreement with The SPAR Guild of Southern Africa (the Guild), which is a non-profit company, whereby the retailer is given the rights to operate under the ‘SPAR’, ‘TOPS’, or ‘SaveMor’ trading names.
Apart from the membership agreement that the retailer has to conclude with the Guild, the retailer can apply for credit facilities with the Spar Group. In this regard, the retailer typically enters into a written credit agreement with the group. The group provides branded products and services to retailers through so-called ‘warehouse transactions’. In this regard, an all-inclusive fee is charged by the group to the retailer on a monthly basis, which is debited against the retailer’s so-called ‘warehouse account’.
In essence, Theo’s Spar entered into this agreement with the Spar Group through its late owner, Theodore Borstlap.
Theo’s Spar was first converted to the Spar brand in 1998 after successfully trading independently under the late Borstlap’s ownership for six years. In 2006, the late Borstlap expanded the store to a ‘Superspar’ and added a ‘Tops’ shop. The store grew to be an iconic establishment in Otjiwarongo. In 2016, the late Borstlap added two ‘SaveMor’ stores to his portfolio—one in Etemba and one in Orwetoveni, Otjiwarongo. ‘SaveMor Etemba’, after much effort, failed to meet expectations and was eventually closed. The ‘SaveMor’ store in Orwetoveni, known as ‘SaveMor Orweto’, continues to trade.
Borstlap passed away on June 6, 2023, after he was involved in an accident on May 4, 2023. Following the accident, the late Borstlap’s son, Rehuel, took over management of the respondent’s business.
CLAIM
The group now claims that Theo’s Spar has breached all credit agreements. The group narrates that during the COVID-19 pandemic, Theo Spar’s trading activities were considerably affected by the lack of tourism in Namibia. Rental collections from the respondent’s property investments also became constrained, and the respondent’s cash flow came under severe pressure. This resulted in Theo’s Spar being unable to service all of its import value-added tax (VAT), subsequently becoming indebted to the Namibian Receiver of Revenue (NamRA) for approximately N$24,000,000.00.
“We assisted the respondent with a so-called ‘head office loan’ through Wesbank to enable the respondent to settle its indebtedness to NamRA. The loan was paid out in early 2022,” says the Spar Group, adding that notwithstanding the aforementioned loan, in early 2023, Theo’s Spar’s trading accounts became overdue.
“The late Mr. Borstlap intended to dispose of four immovable properties to raise cash, but on May 4, 2023, he was involved in an accident that ultimately resulted in his death on June 6, 2023. While the late Mr. Borstlap was in the hospital after the accident, the Borstlap family, including his spouse (Corlia) and his son (Rehuel), took control of the respondent’s business operations. It soon became apparent that, due to the late Mr. Borstlap’s many commitments, the respondent’s cash flow was insufficient to cover all of the respondent’s expenses, including its continuing import VAT obligations to NamRA. The overdue amounts on the respondent’s trading accounts with the applicant also began to increase.
“Under Rehuel’s management, the respondent has been able to temporarily meet its financial obligations. However, the respondent’s cash flow continues to be drained by other loans within the respondent’s immovable property portfolio. The respondent also remains substantially indebted to NamRA,” claims the Spar Group.
The Group further claims that after the late Borstlap’s passing, Rehuel approached Alwyn van Straten, a restructuring practitioner at Executrust (Pty) Ltd, to assist them in developing a plan to restructure their business.
“On June 18, 2024, we were advised by Rehuel and Van Straten that, although they continue to work on the restructuring plan, they foresee that the respondent will not be able to pay all of its creditors by the end of June 2024. We have a real concern that once the respondent defaults on its payments to other creditors, one or more of those creditors will make an application for the respondent’s liquidation,” the Spar Group notes, further adding that in order to ensure that it is a secured creditor of Theo’s Spar and to ensure that the security that it holds is not dissipated, the Spar Group needs to take urgent possession of the movables.
Last week, Judge Nate Ndauendapo in part handed an order authorising and directing the deputy sheriff for the district of Otjiwarongo to take possession of and retain, on behalf of the Spar Group, all movable assets and effects (of every description and of whatsoever nature and wherever situated) of the respondent, thereby perfecting the applicant’s general notarial bonds registered under numbers BN6109/2012, B1528/2012, B4640/2019, and B2791/2022, pending the return date of the rule nisi.
The judge also in part ordered that a rule nisi be issued calling upon Theo’s Spar to show cause on August 2, 2024, at 09:00, why an order confirming the perfection of the notarial bonds registered under numbers BN6109/2012, B1528/2012, B4640/2019, and B2791/2022 with the Deeds Office, among others, should not be granted.