Shakeman Mugari/Eric Chiriga
TROUBLED National Discount House (NDH) this week looked set to miss its self-imposed Christmas deadline to consolidate the bank into listed FBC Holdings (FBCH) Ltd, an outstandin
g matter for eight months.
A spokesman for the pro-merger group, ostensibly made up of creditors and depositors of the stuttering bank who closed in on shareholding in September upon failure to secure maturing investments, said they now looked forward to sealing the deal early next year.
Directors of FBCH and representatives of the interim arrangement at NDH, led by Edwin Manikai, had already met and set their sights on clearing the niggling issues before Christmas.
However, due to delays and the power vacuum at the Central Avenue discount company, the parties have been forced to move the deadline to January next year.
Said the spokesman this week: “It won’t be possible (to conclude the merger) before Christmas, as we had earlier expected.
“We have covered considerable ground, but we still need to fix other things.”
He said the talks had reached “an advanced stage”, but because some of the directors had gone on holiday and they were yet to agree on the share-swap structure, it was not possible to consummate the deal before year-end.
“We believe the deal would only be done early next year. You find that some non-executive directors might not attend crucial meetings,” he said.
Much as FBCH has demonstrated willingness to rescue NDH, observers said it seems the NDH side was delaying critical issues due to the elaborate debt-equity conversion process where some creditors are still to be persuaded into following that action.
About 87% have since nodded to the arrangement, though.
“We are still going to have meetings with some of the creditors next week to persuade them to convert (debt into equity).
“We believe the meeting would see most of them converting,” said the official on Wednesday, giving the impression that the majority of resisting creditors were small investors.
“We are now targeting small investors (those holding between $5 to $50 million) who have not had the chance to convert. There are just a few creditors we have to convince,” he said.
Manikai, in Europe this week but active in tripartite talks involving another stakeholder, the Reserve Bank of Zimbabwe, has been at the forefront of pushing creditors to endorse the FBCH amalgamation.
He recently told businessdigest that FBCH would only bail out and enter into a deal after “NDH had cleared all its obligations with the creditors”.
“That is why we now want all the creditors to take up shares so we can start on a clean sheet,” the former FBC director said.
NDH’s successful merger with FBCH fulfils a long-intended tripartite merger, also involving another Zimbabwe Stock Exchange listed company, Southern Africa Reinsurance Company.