RBZ re-tenders Cairns, Astra shares

HARARE - Debt-ridden Reserve Bank of Zimbabwe (RBZ) has re-invited tenders for the disposal of its shareholding in food processor Cairns Holdings Limited (Cairns) and paint maker Astra Industries Limited (Astra), as the central bank moves to shed quasi-fiscal operations.

The apex bank is currently offloading all non-core assets bought during the economic downturn resulting in the institution assuming supra-ministerial roles.

The sale of the shares is expected to ease its debts of approximately $1,2 billion.

“Consistent with the Reserve Bank of Zimbabwe Act (Chapter 22:15) which requires that the Reserve Bank of Zimbabwe (RBZ) disposes of its assets not related to its core functions, the Reserve Bank hereby notifies the public that it intends to re-tender…,” said the RBZ in a statement.

This comes as Finance minister Tendai Biti has told Parliament that it was no longer possible for the RBZ to engage in quasi-fiscal activities since the RBZ Act was amended to ensure that it stuck to its core business.

The adjudication of the bids relating to the acquisition of Cairns, the RBZ said, would be administered by TN Financial Services while that for Astra would be handled by CBZ Bank.

Through its investment vehicle, Finance Trust of Zimbabwe (Fintrust), the RBZ holds a 63,58 percent stake in Cairns and 63,96 percent in Astra.

Cairns — listed on the Zimbabwe Stock Exchange — is a food and beverages company while Astra has interests in paint, steel and chemicals.

The troubled central bank is also subletting its property in Mabelreign, Reserve Bank Sports Club.

Following a relentless pursuit by creditors, President Robert Mugabe in 2010 invoked a statutory instrument that made the RBZ immune from any court action that could result in the sale of its assets to pay off debts.

While the net asset value of the investments could not be determined, indications are that it could fall short of the funds required to settle the bank’s total debts.

The debts were accumulated through funding programmes such as agriculture support, procurement of maize, medicine, supporting elections, state enterprises and government ministries.

The RBZ also used foreign currency from non-governmental organisations and companies’ accounts held with the institution.

Banking institutions would have to be restituted a total $83 million for the statutory reserves used by the RBZ.

The central bank must also compensate corporates to the tune of $80 million and NGOs $20 million.
According to the central bank, $184 million was used to settle Zimbabwe’s arrears with the International Monetary Fund.

The RBZ also owes the Reserve Bank of South Africa $10 million, Equatorial Guinea $222 million for fuel supplies while Malawi central bank is owed $20 million for funds extended to cover critical national programmes.

The central bank is currently offloading none-core assets.

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