Home » General » Chinese Firm Offers Interfin Lifeline

Chinese firm Belle Holdings has offered to inject $50 million into the struggling Interfin Bank to save it from liquidation. The Reserve Bank of Zimbabwe has since given the foreign investor up to December 24 to provide proof of funds and a letter of commitment if the bank is to be rescued from liquidation. RBZ wrote to the bank’s curator, Mr Peter Bailey, in September this year recommending that a board resolution be passed to the effect that the bank’s licence be surrendered for cancellation.

The central bank aised the curator to give the board an authority to exercise that power as this would be in the best interest of depositors and other creditors.

Interfin chairman Mr Tim Chiganze told the bank’s EGM that following the request a board meeting noted that there were two potential investors that are still very keen to invest in the bank.

“That proposed resolution failed. It was also noted the bank could pursue settlement of debts by assets as opposed to cash only.

This would ensure that the depositors and other creditors’ value was preserved or protected,” said Mr Chiganze.

“It was agreed with the central bank that the extension of the curatorship would be conditional upon evidence of a concrete recapitalisation plan to be submitted to the RBZ by no later than December 11.”

Mr Chiganze said it was further agreed that an anchor shareholder was required for the capitalisation and balance sheet restructuring of the bank.

“The current serious potential investor (Belle Holdings) was requested to provide proof of funds and an irrevocable letter of commitment by the 24th of December 2014 and these being the conditions upon which the current curatorship would be extended.

“Failure to meet the above mentioned conditions shall result in the bank being placed under provisional liquidation, for 3 months, at the expiry of the current curatorship period ending 31 December 2014,” said Mr Chiganze.

In turn Belle would acquire a majority stake in the troubled financial institution.

He said if the conditions are met before the end of the month or during the provisional liquidation period, the liquidation would be put on hold to allow the resuscitation of the bank.

However, there won’t be any need for the bank directors to surrender the bank licence.

Interfin was placed under a recuperative curatorship on June 11, 2012 for an initial period of 3 months and a corrective order was issued.

The curatorship period was subsequently extended to December 31, 2014 to give the curator and the board enough time to cause the recapitalisation of the bank and address its liquidity and capital deficiencies as per the corrective order.

In the same vein, the borrowers would also have enough time to meet their repayment commitments.

Several potential investors have expressed interest in the bank for the past two and half years.

However, no capitalisation transaction with any investor has been concluded for the bank.

Mr Chiganze said debt recovery by the curator has been very slow due to the current liquidity crunch resulting in the bank being unable to accumulate enough cash resources to meet its operations.

He said the bank is engaged in negotiations with ZAMCO over its non-performing loans that still have sound underlying security.

Source : The Herald