Zamco assumes $14m Metbank debt

HARARE - The Zimbabwe Asset Management Company (Zamco) has assumed about $14 million of Metbank’s debts to regional lenders, as the bank moves to clean its balance sheet.

The financial institution’s chairman Wilson Manase yesterday said of the money, $9,3 million had been taken over by the government special purpose vehicle as a result of a novation agreement with the PTA Bank.

A novation of debt strategy occurs when a new debt is introduced to replace the old one.

“During the year, the bank entered into a novation agreement with the PTA Bank and Zamco for the transfer of the balance of $9,3 million the bank owed PTA Bank to Zamco.

“The new Zamco facility matures in 2018 and attracts an interest at a 10 percent per annum,” Manase said in a statement accompanying the group’s financials for the year to December 2015.

The Metbank boss also said apart from the $9,3 million, Zamco had also assumed an additional $4,4 million.

“In a separate arrangement to the novation with PTA Bank, Zamco also took over $4,4 million of the line of credit due and payable to Afrexim Bank under the same terms as those applicable to PTA Bank,” he said.

Metbank — which reported an after tax profit of $260 000 for the year ended December 31, 2015 from a loss position of $3,1 million prior comparable period — also successfully entered into compromise arrangements with some creditors.

“During the year, the bank successfully entered into compromise arrangements with some depositors whose balances were above $100 000.

“This arrangement… paved way for the issuance of preference shares and/or debentures, effectively converting short-term creditors to long-term (three years) instrument holding investors,” he said.

From the arrangement, a total of $35,1 million worth of debentures were issued during the year.

The instruments carry a coupon rate of two percent per annum and are secured by investment property worth $38 million.

Manase said Metbank continued to pursue austerity cost cutting and containment measures in the year under review, which resulted in a 44 percent decrease in operating expenses to $10,9 million.

The bank’s net interest income slumped to $4,3 million from $14 million prior period attributed to a reduction in the group’s credit portfolio.

Other income increased 17 percent to $1,5 million following commission earnings from third party products such as bancassurances.

Total assets were down on prior year to $157,8 million from $159,4 million as liabilities stood at $S105 million down from $116,9 million.

“To this end, the bank secured a $10 million line of credit which as at year end was utilised to the tune of $5,4 million,” said Manase.

Comments (1)

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makstafas - 30 March 2016

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