By Siseko Njobeni

Property group Pinnacle Point scrambles to raise capital in a weak property market.

Pinnacle Point, one of SA’s top golfing attractions, is being sold as embattled leisure and lifestyle property group Pinnacle Point scrambles to raise capital in a weak property market.

Already the company has scaled back head-office staff and sold assets that do not form part of its future strategy.

Pinnacle’s board has now decided owning golf courses will not be part of its future strategy.

In line with this change in approach, the company last week announced the disposal of the Clarens golf and trout estate in the eastern Free State. The company said it was at an advanced stage of concluding the sale of the estate. But on Friday the negotiations were still continuing.

The AltX-listed company has taken steps to dispose of the Pinnacle Point Beach & Golf Resort. On Friday, Pinnacle said it had entered into an agreement with an unnamed consortium "that wishes to convert the Pinnacle Point Resort into a five-star resort and host a golf championship at the resort, subject to conditions precedent".

The Pinnacle Point golf course, located near Mossel Bay on the Garden Route in the southern Cape, stretches along 4km of coastline. Pinnacle said it would announce details of the sale once "certain" conditions had been met. The Pinnacle Point Beach & Golf Resort is located on 400ha of prime land, of which 100ha is nature reserve.

The group has embarked on various cost-cutting measures, including staff reduction.

In its results for the six months ended August 31, Pinnacle said the reduced staff costs would bring "substantial" savings.

Pinnacle has said it is in "advanced" discussions with new potential investors in the company "which will bring in fresh capital and debt funding in order to realise the full potential of its property assets".

It told shareholders last week that earnings per share and headline earnings per share for the 12 months to February 28 next year would be between 60% and 80% higher than the previous year.

The expected higher earnings will be a breakthrough for a company that has described the current financial year as one of "stagnation".

Meanwhile, Moneyweb reported that law firm Edward Nathan Sonnenbergs has made a liquidation application against Pinnacle Point Group in respect of legal fees amounting to more than R771000. Moneyweb also said the company owes its chief operating officer, Stefan Braun, a month’s salary.

There were also reports earlier this month that construction workers deserted the construction site of the R1,5bn luxury Wedgewood Estate in Port Elizabeth because they had not been paid.

Source: Business Day