Bride Loans Enter Business Rescue
Falling profits and climbing overheads and a steady decline in recoveries have pushed unsecured lender Bridge to the brink of collapse. Half way through September the folk at Bridge Loans decided they need to take drastic action or face losing everything, much like African Bank recently did. Bridge has now called in business rescue practitioner George Nell to try right their failing business model.
African Banks Fault?
Bridge chief executive Emile Aldum said that many of their investors had decided to be cautious and pull back on investments following the recent failure of African Bank and it’s dismal collections on outstanding debts. Bridge needed new funding to keep things running smoothly and thus the lack of this capitol input has seen them have to restructure or die.
Big Promises Now Not So big
In the past Bridge’s “guaranteed” returns of an amazing 19% . Remember what your mother said about things that seem too good to be true? Well sadly those only entering what is hoped not to be the bottom of a… triangle shaped… looking investment and return scheme have seen that promise recently slashed all the way down to a much more realistic 6% .
Around 1200 investors, each of whom is said to have put at least one million Rand into the scheme, now have to wait as Mr Nel figures out if the entire thing can actually be saved and if so how. If he feels it cannot be saved then the whole shebang goes into liquidation. They should find out about halfway through October.
What about Cambist?
The relationship between Bridge and Cambist has often been discussed (we even had a chart at one point in the media trying to untangle the web). Well when days are dark friends are few as they say. Once the announcement was made Cambist immediately moved to make it clear that they have nothing to do with Bridge and their problems. Cambist markets itself as a “product” of One Law, which is a firm run by one of the Bridge Group’s original founders Mr Cornelius Aldum. His son, Emile Aldum, is CEO of Bridge. One Law went to great lengths to restructure itself when a lot of media attention fell on them a few years back and are confident that they have addressed those sort of concerns. That said, people are now wondering how the Bridge situation will affect One Law and Cambist.
Strong Links Despite ‘Restructure’
One Law (who basically own Cambist) track debt defaulters and then goes about collecting those funds by using a number of other companies (see below).
- They use the law firm Flemix and Associates to secure garnishee orders on their behalf.
- Flemix and Associates (previously Coombe and Associates), is run by Clifford Coombe.
- Clifford Coombe is listed on a Bridge Loans letterhead as a director of Bridge.
- Cambist, in turn, sources some of the debt that it ‘sells’ to it’s clients from Experato which is a division of Bridge.
- Cambist use Flemix (formerly Coombe) as it’s primary company to get their garnishee orders processed.
Debt Review for Investors?
Good news is that if the business rescue doesn’t work out and the end result is liquidation then all those investors who take a million rand whack and lose out on all their future revenue can always apply for debt review. That way they can stay out of any debt collection web of garnishee orders, harassment and any NCA Section 103(5) overcharging on EAOs.