{"id":805273,"date":"2025-01-03T09:00:00","date_gmt":"2025-01-03T07:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=805273"},"modified":"2025-01-03T10:09:24","modified_gmt":"2025-01-03T08:09:24","slug":"company-founded-by-south-african-rugby-boss-becomes-technically-insolvent","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/805273\/company-founded-by-south-african-rugby-boss-becomes-technically-insolvent\/","title":{"rendered":"Company founded by South African rugby boss becomes technically insolvent"},"content":{"rendered":"\n<p>Labat Africa, founded in 1995 by former rugby boss Brian van Rooyen and Victor Labat, has become technically insolvent.<\/p>\n\n\n\n<p>Brian van Rooyen was elected president of the South African Rugby Union (SARU) in 2004 but was voted out two years later.<\/p>\n\n\n\n<p>He has served as Labat&#8217;s CEO since its inception. The company was listed on the Johannesburg Stock Exchange (JSE) in 1999.<\/p>\n\n\n\n<p>Since 1995, it has been a major South African government contractor providing consulting and related services, implementing many high-profile assignments.<\/p>\n\n\n\n<p>However, the company has changed significantly over the years and has outlined a plan to reposition itself in 2019.<\/p>\n\n\n\n<p>The Labat Africa Board has decided to transition the business from an investment holding company into a cannabis business.<\/p>\n\n\n\n<p>The new strategy for Labat was to focus on healthcare, wellness and industrial hemp amidst legislative changes regarding cannabis globally.<\/p>\n\n\n\n<p>The company has made a number of acquisitions in the cannabis space, as well as forming strategic partnerships. These include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Sweetwater Aquaponics<\/strong> \u2013 A GACP, GMP and SAHPRA-approved cannabis cultivation and processing facility.<\/li>\n\n\n\n<li><strong>CannAfrica<\/strong> \u2013 A retail business that manufactures a wide range of CBD-infused health and wellness products.<\/li>\n\n\n\n<li><strong>The Highly Creative<\/strong> \u2013 A company that owns IP such as Genetics, technology and processes as well as a R2.1 billion offtake agreement.<\/li>\n\n\n\n<li><strong>Biodata<\/strong> \u2013 A research company with a focus on using cannabis as a treatment for patients with a variety of ailments.<\/li>\n\n\n\n<li><strong>African Cannabis Enterprises (ACE Genetics)<\/strong> \u2013 A cannabis company which owns various genetics and currently trades in cannabis raw materials.<\/li>\n\n\n\n<li><strong>Echo Life<\/strong> &#8211; A Miami-owned CBD health and wellness company.<\/li>\n<\/ul>\n\n\n\n<p>Labat set itself a goal of becoming the market leader in the medicinal and industrial cannabis space.<\/p>\n\n\n\n<p>In its latest annual report, the company said it has expanded its retail footprint and scaled its cannabis cultivation facilities.<\/p>\n\n\n\n<p>Labat said it is positioning itself to consolidate the cannabis market in South Africa through strategic acquisitions, partnerships, and organic growth.<\/p>\n\n\n\n<p>\u201cBy integrating fragmented market players into our ecosystem, we can maximise efficiencies, reduce redundancies, and create a unified market leader,\u201d it said.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Labat becomes technically insolvent<\/strong><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/01\/15-CannAfrica.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/01\/15-CannAfrica-1024x576.jpg\" alt=\"\" class=\"wp-image-805275\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/01\/15-CannAfrica-1024x576.jpg 1024w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/01\/15-CannAfrica-300x169.jpg 300w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/01\/15-CannAfrica-768x432.jpg 768w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/01\/15-CannAfrica.jpg 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure><\/div>\n\n\n<p>Labat Africa\u2019s latest financial results showed that the company has become technically insolvent.<\/p>\n\n\n\n<p>A company is technically insolvent when its liabilities outweigh its assets. In this situation, the company has negative equity.<\/p>\n\n\n\n<p>A technically insolvent company cannot settle all its liabilities if all its assets are liquidated. This means drastic measures are needed to improve the balance sheet.<\/p>\n\n\n\n<p>Labat Africa\u2019s short-form announcement audited results for the year ended 31 May 2024 showed that it had negative equity.<\/p>\n\n\n\n<p>The company has total assets of R123.4 million and total liabilities of R142.8 million, leaving it with negative equity of R19.5 million.<\/p>\n\n\n\n<p>It explained that it is in a negative equity position of R19,4 million due to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Signification adjustments to the carrying value of its intangible assets.<\/li>\n\n\n\n<li>The suspension of its shares from trading on the JSE, preventing it from issuing new shares.<\/li>\n<\/ul>\n\n\n\n<p>The company\u2019s income statement also showed challenges. Group revenue decreased 2% to R48.5 million compared to the prior year.<\/p>\n\n\n\n<p>This decrease was due to the expiry of the Sasol contract during the year. Strong healthcare revenues partly offset it.<\/p>\n\n\n\n<p>Gross profit for the year increased to R29.8 million, reflecting a 41% increase compared to the prior year.<\/p>\n\n\n\n<p>Operating expenses increased to R47.7 million, up 5.8% from the prior year, and the company plans to cut costs to improve the situation.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/finance\/805279\/the-south-africans-behind-a-r14-billion-fintech-startup\/\">The South Africans behind a R14 billion fintech startup<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Labat Africa, founded in 1995 by former rugby boss Brian van Rooyen and Victor Labat, has become technically insolvent.<\/p>\n","protected":false},"author":10,"featured_media":805274,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[21303,16502,21304],"class_list":["post-805273","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-brian-van-rooyen","tag-labat-africa","tag-victor-labat"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/805273","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=805273"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/805273\/revisions"}],"predecessor-version":[{"id":805591,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/805273\/revisions\/805591"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/805274"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=805273"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=805273"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=805273"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}