Home » Business » FBZ Pulls Plug On Tetrad Deal

FINANCE Bank of Zambia (FBZ) has terminated negotiations to acquire a controlling equity stake in Tetrad Investment Bank (TIB), businessdigest has established.

In an update to customers dated December 11 2014, the chairman of the Scheme of Arrangement, retired Justice George Smith said FBZ had ended their interest in TIB.

“Our creditors are further aised that unfortunately negotiations with Finance Bank of Zimbabwe Plc (FBZ) have been terminated by FBZ,” Smith said. “FBZ has written to the Reserve Bank of Zimbabwe (RBZ) to apprise them of this position.”

FBZ had commissioned the revision and updating of a previous due diligence report, a process which has since been completed by Deloitte Zambia as well as writing a letter to the RBZ expressing its interest in Tetrad’s equity stake.

TIB approached the High Court in July this year seeking relief from creditors.

High Court judge Justice Nokuthula Moyo then ruled that Smith, or any other person nominated by creditors, should chair a meeting of creditors to get a deferment on claims until the recapitalisation of the bank had been completed. The meeting held on the 8th of August agreed on the deferment to October 31.

In a letter to creditors, dated October 23 2014, Smith said the bank has entered into negotiations with FBZ which wanted an equity stake in the bank before the agreement with Horizon Capital Consortium Holdings Pvt Ltd (HCCH). This ensured the extension of the deadline to January 31 2015.

On the deal with Russian investment group HCCH which had agreed to acquire a controlling stake in the diversified financial group, Smith said the Russian consortium was still interested in consummating a deal despite frustrations over delays being experienced in finalising it.

“HCCH aises us that it continues to work on bringing funds into the country for the completion of the investment transaction,” Smith said. “HCCH remains committed and has not withdrawn from the transaction, but the delays in completion have become very difficult for the bank to manage.”

Smith said the notice by the RBZ that TIB should desist from taking any deposits from the public during the tenure of the scheme and from issuing new loans was “extensively misreported” as an instruction to cease banking business by Tetrad.

“The bank is not prevented from making payments under the humanitarian exception to the Scheme moratorium, and bank loans may be repaid or recovered in the normal course of business,” Smith said, adding that the financial institution remains connected to the RTGS system to facilitate payments.

“Creditors will be contacted in due course with a further update,” Smith assured the banks’ customers.

Source : Zimbabwe Independent

Archives