Home » Industry » Tetrad Creditors Give Investor Ultimatum

Tetrad depositors and creditors have given a one-month ultimatum to Horizon Capital Consortium Holdings to show the colour of their money and come up with a concrete commitment to invest in the bank. Tetrad Bank, which could face liquidation after the expiry of its two-months provisional judicial management, has been courting HCC for months. However, no date of conclusion has been intimated, with most creditors doubting the existence of the investor. The resolution was passed after realisation that unsecured creditors and depositors are likely to get a measly 10c per dollar, should the bank be placed under provisional liquidation in accordance with judicial manager Mr Winsley Militala’s recommendation.

Mr Militala said he had held an unsuccessful meeting with local partners of HCC. However, he said it appears that the transaction will not come to conclusion as the investors are not willing to make a bankable commitment.

“It is the provisional manager’s considered opinion that the bank should be placed under provisional liquidation in order to salvage the value that remains in the bank for the benefit of its depositors and creditors,” he said at the first creditors’ meeting held yesterday.

He added that if the Horizon transaction is consummated sooner, the liquidator can always exercise his powers within the Companies Act to bring the bank to life, subject to the approval of stakeholders. In his report, Mr Militala said accumulated losses as at January 31 2015 stand at $54 million.

Total liabilities exceed total assets by $26,3 million, indicating the existence of material uncertainty casting doubt on the bank’s going concern status. The bank has a negative core capital of $31,96 million, with return on equity at -37,4 percent.

Cash is considered the most liquid asset in terms of meeting payment obligations and right now the bank has no liquid assets. As at the end January, most of the bank’s assets which include land and buildings, were pledged as security with creditors.

The bank’s investment properties amount to $13,328 million, with $76 600 pledged with NSSA already auctioned and the bank had Zimplow shares amounting to 19 753 196 which were used as security against creditors.

The Reserve Bank of Zimbabwe last year suspended Tetrad Investment Bank from taking deposits and issuing loans until the troubled institution has completed its recapitalisation exercise.

The bank was placed under judicial management following the expiry of its scheme of arrangement on January 31. The provisional order for judicial management expires in April.

Source : The Herald