R22.80 December/January www.thecallsheet.co.za
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WATERFRONT STUDIOS - WHAT WENT WRONG? GENERAL INDUSTRY
Mike Smit
UPDATE: At the time of going to press, Jurgens revealed that the provisional liquidators had received offers for some of the company’s assets, and that those offers were under consideration. Ex Managing director and founder of Waterfront Studios Mike Smit, general manager gary Edwardes and liquidator Jurgens Steenkamp talk about the liquidation process, the future of the company and what went wrong.
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ike explained what he thinks went wrong at Waterfront Studios, saying: “The company was heavily geared and did not have the resources to adapt to the rapidly changing industry. New competition and the subsequent loss of key talent was a major blow to the company. This could have been avoided! Continued spending on litigating and investing in projects without the available funds resulted in the company being in the position it is in today” Liquidator Jurgens stressed that time is indeed of the essence for the company, saying: “We want to see to what extent we can keep the busi-
ness alive with one aim and that is to sell it as a going concern. My duty is to the creditors of the company and the view is that we can do better for creditors to sell it as a going concern rather than to just sell a heap of assets. “ Jurgens continued: “i can’t give commitments to producers who want to come into the studios for the next six months. We obviously have a very short window and the decision was made that we would run until
the end of December. if by Friday 9 December 2011 there is no clear indication that there are people who are committed to buying it as a going concern, then it becomes a foregone conclusion that we will shut down and won’t start up again in January.” Gary revealed that they are talking to a handful of different companies who are looking to buy, some of them looking to buy the whole business and others to buy parts of
it. He said: “My gut feeling tells me there should be offers by the end of this week.” Although there is a court date set for 29 January 2012, Jurgens explained that the nuts and bolts of the liquidation will be finalised far sooner. He explained that the courts will grant a final order of liquidation on 29 January, and that if any party wished to argue against that order they would have the opportunity to do so then. Jurgens said: “As far as
the business is concerned – that’s a commercial decision. it’s got nothing to do with the court; it’s a decision that we as provisional liquidators have to make. i can’t keep the business running while waiting for the court if in this period there are losses of three or four hundred thousand being incurred – obviously we’re not doing our creditors any favours if we do that. ” Gary and Jurgens revealed that the job losses since the start of the liquidation process have been relatively low. Once the company went into provisional liquidation, all employment contracts were suspended. There have been eight job terminations and of those employees whose contracts were suspended, 15 are not being utilised at the moment. When asked what went wrong at Waterfront Studios, Gary cited the recession; the crossover from film to digital and the internal issues in management. He said: “A lot of the internal issues in the business have affected us. And i think when that happens you tend to take your eye off the ball, the ball being the customer and i think that’s been a fundamental problem in this business. That hasn’t helped.” Continued on page 17