Tetrad faces liquidation?

Published: 21 June 2015

Tetrad Investment Bank's future hangs in the balance as creditors and depositors meet for the last time today in the capital to decide the troubled financial institution's fate.

At the last meeting held in March, creditors gave a potential Russian investor one month to inject fresh capital into the troubled bank or else face liquidation.

This comes as Tetrad, whose licence was withdrawn by the Reserve Bank of Zimbabwe and subsequently put under judicial management, has been failing to secure an international investor to bail its operations.

The ailing bank - part of the Tetrad Holdings Limited group, which comprises an asset management company and a micro-lending unit - had a negative capital of nearly $20 million as at December 31, 2014.

At the March creditor's meeting, Tetrad judicial manager, Winsley Militala, said the Russian investor was yet to give a solid commitment to saving the bank, adding the institution had to be liquidated.

So far, the High Court has received 400 claims from Tetrad bank creditors, while the bank has about 3 000 depositors.

The judicial manager is on record saying the bank's collapse had been a direct result of Non-Performing Loans (NPLs), which reportedly make up about 90 percent of the defunct bank's loan book.

About 40 percent of the NPLs were unsecured loans amounting to $25,1 million.

Tetrad owes $22 million to secured creditors and an additional $41 million to unsecured creditors.

According to Militala, the bank's assets are pegged at $43,5 million with $69,8 million in liabilities, contrary to the $85 million and $83 million presented by Tetrad management last year.

The creditors further agreed to a January 31, 2015 deadline to allow Horizon Capital to finalise acquisition of a controlling stake in the bank.

Before the scheme meeting, creditors had obtained writs of execution to attach the bank's assets.

However, the bank had since filed an application for consideration to be placed under judicial management at the Bulawayo High Court following the continued financial crisis it faced.

In a ruling made on January 29, 2015, Bulawayo High Court judge Justice Martin Makonese indicated that Tetrad should be placed under judicial management for an indefinite period.

Last year at a scheme meeting, creditors voted to protect the bank's assets pending finalisation of a reported $200 million rescue deal by Horizon Capital Consortium made up of a Russian investor Sergey Pokusaev, the Zimbabwe government and other local investors.

However, the deal has not yielded results.
- dailynews

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