Relief for Tetrad depositors

HARARE - Tetrad Investment Bank (Tetrad) depositors could heave a sigh of relief after a Russian investor, Horizon Capital Consortium (HCC), expressed commitment to inject more than $150 million to save the troubled financial institution from total collapse.

HCC representative Munyaradzi Kereke told Tetrad’s creditors yesterday that the financial rescue package would only be unveiled “if due diligence is completed” on the bank.

Kereke noted that the Russian investor — known as Sergey Pokusaev — held meetings with government and agreed to pay the sum after creditors expressed fear of being “taken for a ride” following a similar meeting held last month.

“The intention was to pay the shareholders what they wanted as it is their right to disclose what they wanted,” kereke said. “I can also confirm that the agreement required that the investor meet the capital requirement of $25 million — a requisite for financial institutions by Reserve Bank of Zimbabwe.”

Tetrad was in January this year placed under provisional judicial management by the High Court to safeguard the interests of depositors and creditors.

Judicial management is essentially a process that gives prime consideration to rescuing distressed companies as a going concern through the formulation and implementation of a reconstruction plan.

Tetrad, which owes $22 million to secured creditors and an additional $41 million to unsecured creditors, was one of the seven institutions being monitored by the central bank after it failed to meet the stipulated capital requirement $25 million by 2013 and $100 million by 2020.

The investment bank — born out of Tetrad Securities Limited, Zimbabwe’s largest discount house registered in 1996 — is technically insolvent as its total liabilities exceed assets by $27,8 million and its cumulative losses scaled $54 million by March this year.

Kereke noted that the financial rescue package is also earmarked for national infrastructure projects such as road and dam construction.

“We have the financial instruments ready for disposal, more like the Treasury Bills to pay for the investment purchase price and the capitalisation of the bank. As investors, we are very deeply concerned that the decision to liquidate will impair not only Tetrad creditors and depositors but interests of the country,” said Kereke.

On the other hand, the bank’s provisional judicial manager Winsley Militala said in his considered opinion, it was prudent that Tetrad be placed under provisional liquidation in order to salvage the value that remains at the bank for the benefit of its depositors and creditors.

“Assuming the Horizon transaction is consummated sooner, the liquidator can always exercise powers within the Companies’ Act to bring the bank to life, of course subject to the approval of stakeholders,” he said.

 

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