The new loan-based model is meant to ensure the institution's long-term self-sustainability. (Madelene Cronje, M&G)
A consortium has thrown Cida City Campus a last-minute lifeline in the form of a multimillion-rand proposal to rescue South Africa’s only fee-free university, which is currently closed and threatened with liquidation.
Instead of recommending final wind-up of business of the institution, provisional liquidators have invited creditors to a meeting next week to vote on the proposal to salvage the facility.
Johannes Muller and Eugene Januarie of Tshwane Trust, whom the Johannesburg high court appointed as joint provisional liquidators of Cida, have sent creditors a circular detailing the proposal.
The circular, which the Mail & Guardian has seen, details the multimillion-rand rescue offer from the consortium comprising Africa Integras, the Cida Empowerment Trust and the Africa Alliance of Young Men’s Christian Associations. It has offered to invest millions in the institution and will operate as Cida Holdings.
“Cida Holdings has approached the provisional liquidators with the intention of returning the company to solvent circumstances and facilitating the resumption of the business of the company for the benefit and interest of the students and employees,” said the circular.
‘Salient features’
The “salient features” of the proposal to rescue Cida, according to the circular, are that three major creditors agree to write down their claims by significant percentages. The City of Johannesburg is being asked to write off 100% of its R9.6-million claim.
The “salient features” of the proposal to rescue Cida, according to the circular, are that three major creditors agree to write down their claims by significant percentages. The City of Johannesburg is being asked to write off 100% of its R9.6-million claim.
The South African Revenue Services is being canvassed to write off 65% of its claim; Cida owes it R4.9-million.
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The Joffe Charitable Trust is being asked to agree to write off 75% of the university’s debt.
With the big three out of the way, provisional liquidators anticipate that the claims of the concurrent creditors total about R5.289-million. Just more than R3.4-million “shall be available for distribution to the concurrent creditors”, said the circular.
Cida was initially said to owe creditors about R30-million, a debt that led to its directors applying to the courts in 2013 to have the institution placed under administration. When this failed, Cida went into provisional liquidation and finally closed the gates in December.
Groundbreaking institution
The Lyndhurst-based institution, which offers a bachelor of administration degree, had about 400 students when it suspended operations.
The Lyndhurst-based institution, which offers a bachelor of administration degree, had about 400 students when it suspended operations.
Cida burst on to the scene in 1999 as a groundbreaking institution to uplift thousands of poor black matriculants. An institution whose sustainability depended on donors, its fortunes dwindled after founder Taddy Blecher, an accomplished social entrepreneur, resigned in 2007.
It cracked after years of mismanagement and failure to attract donors following Blecher’s departure.
The new proposal will be adopted if 51% of creditors in attendance vote in its favour. It would then become an order of the Johannesburg high court “on or before” September 30.
“Cida Holdings shall [then] resume business of the company to facilitate resumption of the provision of tertiary education to the indigent students immediately upon the sanction date or upon the agreement with the provisional liquidators upon approval of the proposal by creditors,” said the document.
Provisional liquidators warned that if any of the conditions to the proposal fail, Cida would be placed in final liquidation. “And in such a scenario, the provisional liquidators submit that the creditors will receive a reduced dividend.”
But if all goes well, “the company will be discharged from provisional liquidation resulting in the resumption and continuation of the business of the company and the continued employment of the employees”.
“The creditors will receive their payment/dividend in relation to their claims sooner than would have been the case if the winding-up of the company was to proceed to finality.”
Confident of acceptance
Andrea Christie Pizziconi, responding from New York on behalf of Cida Holdings to the M&G‘s emailed questions, said they were confident the latest offer would be accepted.
Andrea Christie Pizziconi, responding from New York on behalf of Cida Holdings to the M&G‘s emailed questions, said they were confident the latest offer would be accepted.
She said their proposal brings in more than R100-million in “socially responsible financing for Cida from several highly credible international and local institutions”, including Africa Integras, Cida Empowerment Trust, African Alliance of YMCAs and the US government’s Overseas Private Investment Corporation.
“Our consortium is very excited to be able to present to Cida’s creditors a solution that not only settles with creditors equitably but also provides Cida with the kind of material investment it needs to emerge as the international model for economically accessible high-quality higher education it was originally created to become,” said Pizziconi.
“This funding will revitalise the campus facilities, repay creditors and invest in strengthening the human capital and academic offerings at Cida. In particular, we will focus on providing substantial holistic support for Cida’s students and staff to ensure their long-term success.”
Loan-based institution
Cida will no longer operate as a free institution, but a loan-based institution. The circular said Cida Holdings would facilitate “financial support for the students, in the form of affordable loans and scholarships”.
Cida will no longer operate as a free institution, but a loan-based institution. The circular said Cida Holdings would facilitate “financial support for the students, in the form of affordable loans and scholarships”.
The company would also “facilitate the employment of students in part-time capacities to assist the students with their financial obligations in respect of living expenses”, according to the document.
But it will remain a home to poor students, Pizziconi said. “Our investment also allows all students access to a combination of affordable funding options including support from the Cida Empowerment Trust, affordable loans, some ongoing donor support and paid part-time internships. These various options ensure all students, regardless of their economic means, can continue to afford to attend Cida.”
The new model is meant to ensure the institution’s long-term self-sustainability. “Going forward, Cida will not be at risk of funding shortfalls if donor support wanes and we will be able to expand enrolment back up to Cida’s historic levels, allowing access to a newly revitalised Cida for even more economically disadvantaged students,” said Pizziconi.
Student Mpume Nkabini said she couldn’t wait to go back to the institution and complete her degree. “We have been sitting home the entire year doing nothing. We wish to go to class as soon as possible, even if it takes pushing to cover a semester in December.”
Pizziconi said they “hope to reopen Cida as soon as possible so that we can start to get the existing Cida students caught up on the time they’ve lost this year so far.
“The welfare of the students and ensuring they are able to get their studies back on track as soon as possible is by far our top priority in the near term.”
Bongani Nkosi
update october 2019
Dear Andrea
We met at the end of the superb #girlsedu event that christina hosted in brookings
I write up notes on new university models- and clearly you know a lot more about south africa and taddy blecher since 2015 than I do- it sounds a sad situation from something that was at one time near its beginning in 1999 was associated with mandela and all youth hope out of south africa
My purpose is not necessarily to try and help anywhere - i dont have the resources for that at tech scale needed
i will be publishing a card game in early 2020- basically the top 50 people -eg attenborough on nature - whose knowledge i believe my father would want all youth to know exists- father http://www.normanmacrae.net was The Economist's sub-editor of 3 movements- end poverty; love each others people east to west ; leapfrog with each new decade of tech- he was awarded the japan emperors main international award for connecting sustainable trade between japan and rest of world-
in 1984 he and i co-authored a book the 2025 report on humanising tech timelines to sustainability goals - we are badly overshooting them especially with the last 5 years of political inertia and misinformation media both with brexit and congress- it is time as director from unicef to find transformative models of education
I would like to understand which of these things were working at one stage - to see if any are eg transferable to places where they could work
My friends, student union clubs and i have done extensive interviewing of taddy on 3 occasions
around 2006-2008
around 2012
around 2015
in the first 2 cases i was associated with london hubs which also had south african branches or diaspora and it was they who collected much of the info before i actually met taddy
in 2006 the interesting thing was taddy was looking for missing curricula
entrepreneurship curriculum which he later built with richard branson and the billionaire founder of spanx who also linked in people like oprah winfree and jeff skoll
coding curricula which i thought he built with google africa
financial literacy curricula
consciousness/belief in self curricula which he built with maharishi and which his wife had practised in china i think
several of his alumni came to present at be the change summits in london around 2007 - they were remarkable in that they had a shared culture- it seemed like the loyalest and most self-confident of alumni clubs
taddy's story in 2012 was that by now he has nearly 10000 alumni - some were earning high wages and giving back- others were scaling social franchises with appropriate digital models across rural and other deprived ares
when i last met him in 2015 july i was introducing him to an owner of an elearning satellite - he was still positive- he had a new emphasis because most children in south africa leave at about 7th grade - his graduates wanted the curricula they had learnt to have equivalent 7th grade curricula - again with apparent partnerships like oprah winfree schools that had fed into the university and branson etc this sounded possible if not to scale at least to clarify lessons on
what i dont want to do is to get into debates of where something never worked- what i do want to do is know if any of the above is still transferable- for example if patrick does host a collaborative
the general idea of a nations new university that understands the tech and prepares ethical graduates to be the future of public servants is i certainly hope what patrick in ghana has all the connections to do
also in asia the universities i know have a different problem- they certainly have no survival problems but equally they dont have eg patricks connections with pretty much every diaspora person who has worked in a top 5 internet company in usa and who wants to give back
andrea i would love to meet and improve shared knowledge - if you are mainly based in new york i can come up there or i am mainly based in dc region when i am not in asia- i do know people quite high up in 1 wise education laureate 2 various chinese education laureates- i know some of the tutors of schwarzman scholars; i want to end universities that get youth in debt without livelihoods - i have interviewed at least 50 leaders of historically black universities during 2010 -2012 when muhammad yunus and about 70 of his supporters promised to find at least one hbuc but we all failed partly because yunus himself got into political row and lost almost everything back at bangladesh a place where fortunately everything continues to grow and grow around brac and blash and the world's largest ngo partnerships- for those interested in bangladesh lessons always happy to share
I think there are many tipping points now as we accelerate through to 5g so i really want to tidy up any past histories of cases as important as blecher once was- coincidentally during un week in new york when i attended facebook session with patrick i also found a pop up version of branson connected with his jamaican networks- they said they are moving from education to hubs but have found a couple of wealthy new yorkers to continue the discussion at least in terms of the jamaican networks
look forward to hearing whether you think its worth meeting - i have quite a lot of information on livelihood education at all ages but i certainly want to correct any misimpressions i (or all girls researchers and hubs i linkin to) have about south african situation
sincerely chris macrae DC region norman macrae foundation
whatapp and wechat and mobile +1 240 316 8157
