New Dawn Prophesy is once again on the brink of insolvency as its creditor, DeARX, is preparing to apply to the Johannesburg High Court for the company to be placed under liquidation.
The application is based on an amount of about R80 000 that has been outstanding since last year, and that Prophesy MD Deon Ferreira admits his company cannot pay back right now.
In 2006, Prophesy - an Oracle solutions provider that counts the State IT Agency and the North West Legislature among its clients - was on the brink of bankruptcy after salaries and bonuses were not paid on time. Towards the end of that year, the bulk of Prophesy's staff walked out to join competitor Simeka, which also landed Prophesy's two biggest clients in the process - Vodacom and Absa.
Last year, Prophesy found itself in the same boat when three former executives filed for liquidation, based on about R1.8 million in outstanding salaries, bonuses, and leave pay.
DeARX MD Andre van Heerden says while the amount his company is owed has been reduced from an initial R1.6 million, Prophesy has just not been able to make the last two payments, due in April and June.
"We don't even speak to them anymore, we leave it to our attorneys," he says. "We are going to court and we could sign as soon as this week. The liquidation application will definitely happen."
Ferreira admits that Prophesy's cash flow currently is such that is does not have the money that is required by DeARX.
"Most of our money comes from government and their year-end was in March, so we are busy renegotiating contracts at the moment," he explains. Prophesy generates about R50 million in revenue per year and has about 30 employees.
"We instructed our lawyers to negotiate with DeARX, because we can't pay now, but we will be able to do so at the end of July."
Ferreira is confident Prophesy will not go under as, if the matter does go to court, a judge will most likely give it 21 days to pay up, which will buy it time until the end of July.
Also, he says, there is enough cash for salaries and other running expenses.
According to Ferreira, Prophesy has already signed R66 million worth of contracts for the next financial year, and is not facing bankruptcy.
Van Heerden, however, alleges that he offered Prophesy a payment plan of R10 000 a month, to which he says the company didn't respond.
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