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Trust on verge of deal


TRUST Holdings is on the verge of securing an investor for its unit Trust Bank Corporation Limited with sources indicating that the deal would be sealed before the end of next month.


A South African company, Mining Oil and Gas Services (MOGS) is keen to inject capital into Trust Bank. The injection is dependent on the company getting approval from government to build a second fuel pipeline from Beira to Msasa, Harare, in an investment worth close to $1 billion.

The conclusion of the deal will culminate in Trust Bank re-aligning its model from a commercial bank to an energy and merchant one. In preparation for the re-alignment, Trust has already let go some of its offices at Trust Towers, the holding company’s headquarters in central Harare.

“The MOGS deal is very much alive. The transaction is being
fast-tracked following changes that happened in government particularly in the Energy ministry. There is a feeling that one of the axed senior officials was taking his time to approve the deal which has potential of creating thousands of job opportunities,” a source said.

Last year, President Robert Mugabe fired Energy and Power Development minister Dzikamai Mavhaire and his deputy Munacho Mutezo alongside six ministers saying it “had become apparent that their conduct and performance were below the expected standard”.

The success of the pipeline deal will rescue Trust Bank that is currently under provisional liquidation. Last year, the High Court appointed the Deposit Protection Corporation (DPC) as the provisional liquidator.

DPC was supposed to put a notice in a newspaper on the developments, but failed to do so.

In a notice yesterday the Reserve Bank of Zimbabwe (RBZ)said the DPC was currently paying out depositors up to a maximum of $500 as per type of account.

“. . . Trust Holdings Limited, the major shareholders of the bank may, during the period between 8 October 2014 and 8 April 2015, engage any prospective shareholders to inject capital into the institution and restore its safety and soundness to levels required as per prudential standards,” RBZ said.

Last year Trust requested six months up to April 8 to finalise discussions with a potential investor.

Negotiations for the project started in the life of the inclusive government, but were abandoned in the run up to the July 31 elections as political parties engaged in campaigns.

The plan will also entail building connecting pipelines to Malawi, Zambia, Botswana and the Democratic Republic of Congo.

Estimates showed that the project would result in the creation of over 100 000 jobs.

The current pipeline can pump 150 million litres a month. However, it is carrying 120 million litres a month. With industry at its peak, the country would require 200 million litres per month.

The new pipeline is expected to move 500 million litres per month.

It is understood that despite the Msasa storage facility having a capacity of 500 million litres, only a tenth was in store, meaning that the infrastructure was underutilised.

MOGS will have a 50% shareholding in the project while government and an empowerment consortium will have the remainder.

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