Financially troubled Lobels Bread has been sued for $4,1 million by NMB Bank after it failed to service a loan forwarded by the financial institution.
According to summons issued last month, the plaintiff (NMB Bank) lent and advanced to the first defendant (Lobels Bread) a loan, in terms of credit facility agreements executed at varying times and in varying amounts in the total sum of $4 360 000.
David Chiweza, Livingstone Gwata, Burombo Mudumo and Herbert Nkala are cited as second, third, fourth and fifth respondents as they bound themselves as surety and co-principal debtors with the first defendant for and in respect of first defendant’s aforesaid liability.
“The loan was advanced in the following manner: the sum of $50 000, through a credit facility agreement dated 10 February 2009, $100 000 through a credit facility agreement dated 9 March 2009, $1 000 000, through a credit facility agreement dated 29 May 2009, $700 000 through a credit facility agreement dated 1 October 2009 and $2 000 000 through a credit facility agreement dated 10 November 2009.
The last credit facility agreement was executed on June 21 2010 and was amended on 20 August 2010. The facility was in respect of a total amount of $4 360 000 which includes the amounts rolled over from monies advanced earlier by the plaintiff,” reads part of the declaration.
“In terms of clause 5.5 of the credit facility agreement dated June 21 2010 in the event of any default by 1st defendant on the terms and conditions of the facility letter, plaintiff is entitled without notice to demand immediate payment of the sums required to cover the existing and contingent liabilities to the bank whether or not such sums are immediately due and payable and in addition to decline to afford 1st defendant any further facilities.”
Lobels Bread last week said it appointed CBZ Bank and Dube, Manikai and Hwacha as its financial and legal advisors as part of efforts to restructure the company’s balance sheet and business operations.