THERE were no bids for the tender to buy the entire shareholding of Tetrad Investment Bank (TIMB) — which owns Tetrad Bank — at the second time of asking, businessdigest has established.
Tetrad is under the provisional judicial management of the Deposit Protection Corporation (DPC). 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.
DPC was forced to re-flight the advert after investors did not come forward when it was initially flighted with a deadline of August 21. However, after the advert was reflighted with the deadline of September 4, there were still no bids for the bank.
When contacted to establish if there were any bidders last week, DPC public relations manager Allen Musadziruma said the committee overseeing the bidding process was not in a position to comment.
“I have been advised that the committee is not in a position to issue any formal comment/statement at the moment regarding the Tetrad tender that was closed on the 4th of September, good day,” Musadziruma said in e-mailed responses to enquiries.
However, informed sources this week told businessdigest that no one came forward to put in a bid to acquire the shareholding of the troubled financial institution.
“We do not have any bidders for the bank,” an insider revealed. “If there is no one to buy then, we will have to consider the next.”
However, the source added that despite there being no bidders, DPC was “still talking” to some parties who have expressed interest.
This development comes at a time AAY Investments Group, a Panama-based venture capital fund, which expressed interest in acquiring equity in TIB, has demanded exclusivity as it carries out a three-month due diligence exercise on the bank as a condition to pursue the transaction.
The group has investments in various countries around the world including Australia, Belgium, Chile, Canada, France, Greece, Mexico and South Africa.
However, the shareholders could not agree to this because there is still Horizon Capital Consortium 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 this year, 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 also 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 deal with the Russian-based investment group Horizon Capital Consortium, put together last year to buy the bank, which is 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 a due diligence on the financial institution before pulling the plug on the deal.