Sata’s death delays Tetrad Bank deal

THE recent death of Zambian President Michael Sata has delayed negotiations between Tetrad Investment Bank and Finance Bank of Zambia (FBZ) for the takeover of the local bank, businessdigest has established.

Kudzai Kuwaza

Sata died October 28 and was buried on November 11.
Sources said the negotiations were put on hold to mourn the Zambian leader.

“The negotiations were supposed to be until the end of this month but because of the Zambian President’s death which delayed negotiations, the talks could extend to the end of December,” the source said.

The Reserve Bank of Zimbabwe (RBZ) last week suspended Tetrad Investment Bank from taking deposits and issuing loans until the local bank completes its recapitalisation exercise.

The bank has since held several meetings with the central bank to help clarify a number of issues with the regulator, sources said.

Tetrad is still facilitating with the national payment system even though they are not taking any new depositors. It is also paying monthly contributions to pensioners who hold deposts with the bank as well as those who need money for medical emergencies.

FBZ could take over the majority stake in Tetrad ahead of Russian investment consortium Horizon Capital Consortium Holdings (HCCH).

This development has prompted Tetrad to request an extension of the reprieve that had been agreed by creditors and depositors at a scheme meeting in August, to defer claims, from October 31 to January 31 next year to in order to allow time for negotiations between the bank and FBZ.

FBZ has since commissioned the revision and updating of a previous due diligence report, which process has been completed by Deloitte Zambia as well as written a letter to the RBZ expressing its interest in Tetrad’s equity stake.

The bank approached the High Court in July this year seeking relief from creditors.

High Court judge Justice Nokuthula Moyo then ruled that Retired Justice George Smith, or any other person nominated by creditors, should chair a meeting of creditors to get a deferment on claims until the recapitalisation of the bank had been completed. The meeting held on the 8th of August agreed on the deferment to October 31.

In a letter to creditors, dated October 23 2014, Smith, who is the chairperson of the scheme meeting, said the bank has entered into negotiations with FBZ which had eyed an equity stake in the bank before the agreement with HCCH.

The Russian consortium, which has asked for more time to consummate the deal, is meanwhile looking at the logistics of transferring its funds to the country complicated by the sanctions imposed on the country, sources said.

The bank will be taken over by the group that will be the first between the two interested parties to implement what is required for the deal to go through, sources noted.

Insiders said the suspension of the bank by the RBZ rubberstamped the ruling of the High Court.