WMMI to lose property over $4 million loan

THE High Court has granted an order enabling FBC Bank to attach Willowvale Mazda Motor Industries (WMMI)’s 161 881 hectares of land in Harare to recover a $4 million debt owed by the vehicle assembly company.

BY CHARLES LAITON

The company, according to court documents, borrowed the money in 2016 to fund its operations.

Part of High Court judge Justice Erica Ndewere’s order issued on February 27, 2018, reads: “It is ordered by consent that the defendants (Willowvale Mazda) shall pay to the plaintiff (FBC) jointly and severally, the one paying the other to be absolved, the sum of $3 859 642 together with interest at the rate of 14% per annum calculated on the daily balance and compounded on a monthly basis with effect from February 1, 2016 to the date of full payment.

“The defendant shall pay to the plaintiff jointly and severally, the one paying the other to be absolved, the sum of $71 306 together with interest at the rate of 12% per annum calculated on the daily balance and compounded on a monthly basis with effect from March 31, 2017, to the date of full payment,” the judge said, adding: “The first defendants’ immovable property being certain piece of land situate in the District of Salisbury called Lot 1 of Lot 6 Willowvale, measuring 161 881 hectares, held under deed of transfer 394/61 dated March 3, 1961, be declared specially executable. The defendants pay collection commission to Messrs Costa and Madzonga Legal Practitioners and cost of suit in the sum of $2 500.”

FBC Bank issued the firm summons in September last year and also cited Motec Holdings (Pvt) Ltd as a co-principal debtor.

According to FBC Bank, sometime in February 2016, it signed a compromise agreement between itself and the two firms in terms of which the parties entered into a new banking facilities.

“The material terms of the agreement were that the initial debt was restructured and that the amount would be repaid in full within a period of five years which translated to the agreed monthly instalments,” the bank said.

“It was a term of the compromise agreement that interest would accrue on the leaned amount at the plaintiff’s (FBC) minimum lending rate from time to time, which was 14% per annum with effect from February 1, 2016 to the date of payment in full.”

The bank further said Willowvale and Motec allegedly breached the repayment terms of the third facility by failing to pay the monthly instalments as agreed prompting the financial institution to approach the court for recourse.

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