HomeNewsCreditors, depositors give Tetrad reprieve

Creditors, depositors give Tetrad reprieve

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CREDITORS and depositors of Tetrad Investment (TIB) gave the institution relief by agreeing to a moratorium in respect of payment of certain liabilities owing to them pending completion of the bank’s recapitalisation exercise at a crucial meeting on Friday.

BUSINESS REPORTER

The move means that the institution won’t be hit with litigation to recover claims and will now finalise discussions with a potential investor.

Preliminary results showed that over 90% of creditors and depositors voted to defer claims and would wait for TIB’s recapitalisation, NewsDay was told yesterday.

A Russian investor, Horizon Capital Consortium, has reportedly shown interest in the bank in a deal that will shore the capital base and unlock lines of credit worth $50 million. In May, the bank’s shareholders approved the takeover by the Russian investor.

Friday’s meeting followed a High Court order last month which instructed the bank to hold a meeting with its creditors.

On July 15, High Court judge Justice Nokuthula Moyo ordered that Retired Justice Smith, or any other person nominated by creditors, should chair Friday’s meeting

with authority to appoint Deloitte & Touche chartered accountants or any other qualified firm of chartered accountants as scrutineers of the scheme meeting.
On Friday, Smith told NewsDay that creditors and depositors had shown much interest in the bank as evidenced by the kind of questions that were asked.
“Tetrad people were able to respond satisfactorily and the impression I got is all the people at the meeting were interested to vote in favour of the resolution because if they vote no, then definitely they are not going to get anything because the bank will just collapse and will be placed under curatorship and that’s not going to create more funds,” he said.

“There is a good potential. The good potential is that they will get their money back plus interest because the interest will be accruing.”
Over 300 depositors and creditors attended Friday’s scheme meeting.

TIB has been under a withering assault from creditors after failing to honour its obligations.

Last month, the High Court issued a default judgment against TIB following the bank’s failure to honour call deposits amounting to about $1,1 million in favour of real estate company HP Nursten & Company.

Early last month, the Supreme Court dismissed an appeal by the bank in a dispute with Bindura University of Science Education involving more than $500 000. The university had invested the money in the troubled bank which the latter was now failing to honour up.

In June, the National Social Security Authority was given the green light to attach Tetrad Bank property to recover nearly $5 million.

In the half year ended March 31 2014, TIB widened its losses to $10 million from $3,89 million in the same period last year.

Operating expenses more than doubled to $10 410 850 in the period under review from $4 642 331 the same period last year.

In the same period, TIB had a cumulative liquidity gap of $30 849 330 up to one month as its assets at $37 082 431 were lower than the total equity and liabilities ($67 931 761).

The gap widened to $33 616 765 from one month up to three months.

Deposits tumbled to $80 058 345 from $92 950 393.

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