South African real estate mogul Michael Georgiou’s firm enters business rescue

Key Points

• South Africa’s Azrapart enters business rescue after court rules it can’t repay R2.3 billion ($128.4 million) owed to FirstRand and Investec.
• Court casts doubt on Michael Georgiou’s proposed UK funding plan, citing lack of credible evidence and Redcore’s questionable financials.
• Independent oversight ordered to manage Azrapart’s assets, including Fourways Mall; business rescue practitioners appointed.

A South African property company tied to real estate mogul Michael Georgiou has been placed under business rescue after a court found it was unable to pay billions in debt and doubted the reliability of a promised foreign bailout.

The High Court in Bloemfontein, South Africa’s judicial capital, ordered Azrapart (Pty) Ltd into supervision on June 5, following an application by FirstRand Bank and Investec Bank, which are collectively owed R2.3 billion ($128.4 million). Georgiou, one of the country’s biggest private property owners, is the firm’s sole director.

Funding doubts cloud Georgiou’s rescue plan

Despite Georgiou’s repeated assurances that a R2.6 billion ($145.1 million) capital injection from a UK-based firm was imminent, the court said it had not seen credible proof that the funds would be delivered. “The court cannot find with any measure of certainty that the R2.6 billion will be transferred,” Judge Loubser said in his ruling. “The matter now needs to be brought to finality in the interests of justice.”

Georgiou had told the court that Redcore Hospitality Holdings, a company registered in the UK, was set to provide the funding to help Azrapart pay off its debt. But after nearly nine months of delays, inconsistent communication, and vague documentation, the court remained unconvinced.

Bank-commissioned investigations into Redcore raised red flags. A UK law firm reported that the company had submitted only unaudited financials from 2021 to 2023, recorded no turnover, and had no employees in the most recent year, casting serious doubt on its ability to support Azrapart’s recovery.

Azrapart rescue begins, oversight ordered

Georgiou filed a last-minute affidavit on May 9, including letters from Redcore and its lawyers stating the firm had access to a €750 million ($866.4 million) equity facility through Corpay UK. But the court said the submission lacked bank guarantees or solid commitments and did not meet the standards expected in high-stakes financial disputes.

With no clear path forward and concerns over how Azrapart’s assets were being managed, including Fourways Mall, which backs part of the debt, the court said independent oversight was necessary to protect creditors and other stakeholders.

Business rescue practitioners Piers Michael Marsden and Lance Schapiro have been appointed to lead the process. The banks’ legal fees will be treated as part of the business rescue, and affected parties must be notified within five days of the court’s ruling.

Real estate titan faces tough shift

Michael Georgiou has long been a prominent figure in South Africa’s real estate sector, having developed and acquired more than 100 properties over the past two decades. Since 2013, he has served as a director at Accelerate Property Fund, which manages a portfolio spanning more than 1,200 tenants and over 440,000 square meters of space.

Last year, Georgiou was forced to sell part of his stake in Accelerate to settle a separate loan obligation. The deal, executed in May, saw him offload shares worth R56.9 million ($3.1 million). According to Accelerate, 107 million shares were sold after Investec exercised its rights under a lending agreement. The sale reduced Georgiou’s stake in the property fund from 29 percent to 21 percent, but he remains one of its largest individual shareholders.