TETRAD Investment Bank (TIB) creditors will meet on Tuesday to consider a proposal to defer claims pending the finalisation of the bank’s recapitalisation exercise. BUSINESS REPORTER
A Russian investor, Horizon Capital Consortium, has reportedly shown interest in the bank in a deal worth $50 million. In May, the bank’s shareholders approved the takeover by the Russian investor.
If creditors agree to the move, it would be a reprieve for Tetrad which has been in the courts to ward off creditors.
Creditors have been besieging the bank with claims and a number of them secured writs of execution to attach Tetrad’s assets.
In a notice yesterday, chairperson of the Scheme Meeting Retired Justice George Smith said the August 5 meeting at Meikles Hotel was a result of a High Court order after Tetrad had approached the courts.
“The purpose of the Scheme Meeting is to consider and, if deemed fit, to agree [with or without modification] to the Scheme, the basic characteristic of which is that the applicant’s creditors will be asked to agree to a moratorium in respect of payment of certain liabilities owing to them pending completion of a recapitalisation of the bank,” Justice Smith said.
On July 15, High Court judge Justice Nokuthula Moyo ordered that Justice Smith, or any other person nominated by creditors, should chair Tuesday’s meeting with authority to appoint Deloitte & Touche chartered accountants or any other qualified firm of chartered accountants as scrutineers of the scheme meeting.
Last month, the High Court issued a default judgment against Tetrad Investment Bank following the bank’s failure to honour call deposits amounting to about $1,1 million in favour of real estate company HP Nursten & Company.
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Early last month, the Supreme Court dismissed an appeal by Tetrad Investment 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 was now failing to honour up.
Tetrad had asked the superior court to decide whether it was proper for the lower court to dismiss as not being urgent its application to stop the attachment and sale of its assets by the university.
In June, the National Social Security Authority was given the green light to attach Tetrad Bank property to recover nearly $5 million by the embattled bank.
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.
TIB said a clean-up of the loan book has seen profitability reduced through provisions and suspended interest.
“Despite expenses increasing on the back of the launch of commercial banking operations, management is still managing these to ensure cost efficiency.
Deposits tumbled to $80 058 345 from $92 950 393.
