Tetrad Bank deal: AAY demands exclusivity

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AAY Investments Group, a Panama-based venture capital fund, which expressed interest in acquiring equity in Tetrad Investment Bank (TIB), has demanded exclusivity as it carries out a three-month due diligence exercise on the bank as a condition to pursue the transaction, businessdigest has established.

Kudzai Kuwaza

The group has investments in various countries around the world including Australia, Belgium, Chile, Canada, France, Greece, Mexico and South Africa. They join Russian investment vehicle, Horizon Capital Consortium Holdings which has also expressed interest in buying the bank that is currently under provisional judicial management. This development comes at a time when the bank’s provisional judicial manager, the Deposit Protection Corporation (DPC), has re-flighted an advert for tenders from parties interested in buying the bank after there were no takers the first time the advert was flighted.

The deadline for the process is today. The DPC took over as provisional judicial manager from Winsley Militala who has since stepped down. He resigned amid sharp differences with the bank’s shareholders over his report on the bank’s financial position to creditors.
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“The AAY never made any progress with Militala so when he left they gave the condition that they be granted 90 days exclusivity, if they are to come back on board and pursue the transaction,” an informed source told businessdigest this week.

“The shareholders could not agree to this because there is still Horizon and others expressing interest so it was not possible to give one party such a period of time bearing in mind that the return date for the provisional judicial management process is October 6.”

In a letter dated April 13 to Tetrad Holdings finance director Thomas Chimanda, AAY project enquiries director Sam Davis said they were interested in acquiring a stake in the bank and seeking an extension of the judicial management of the bank to allow them to carry out a due diligence exercise for 90 days.

In his letter to Chimanda, Davis said it was imperative to get an extension to ensure that the expenses they would incur as a result of the due diligence exercise “will not be in vain”.

He said they would require the engagement of lawyers and accountants who are experts to carry out the exercise on their behalf. Davis added that preliminary discussions with these experts indicated that 90 days was usually required for such an exercise.

The Horizon deal, which is reportedly being facilitated by businessman Munyaradzi Kereke, is still on the table, but remains unfinalised.

Finance Bank of Zambia had also expressed a keen interest in buying the bank going as far as carrying out due diligence on the financial institution before pulling the plug on the deal.

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