HomeNewsTetrad, creditors in crunch meeting

Tetrad, creditors in crunch meeting

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TETRAD Investment Bank (TIB) will have a crunch meeting with creditors today in which the troubled financial institution wants to push for a deferment of claims pending the finalisation of a 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.

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

On July 15, Justice Nokuthula Moyo ordered that Retired Justice Smith, or any other person nominated by creditors, should chair today’s meeting with authority to appoint Deloitte & Touche chartered accountants or any other qualified firm of chartered accountants as scrutineers of the scheme meeting.

In a notice last week, Justice Smith said today’s meeting 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.

The bank 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 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.

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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