Interfin Bank gets new investor

Published: 30 January 2014

Interfin Bank Limited has found an investor who is willing to inject $50 million needed to recapitalize the ailing institution.

Speaking after the Interfin Financial Services annual general meeting today, the bank's managing director Raymond Njanike said the potential investor would arrive in the country by end of this week to conduct a due diligence on the bank.

"We need a fresh injection of capital at the bank because we cannot rely on the repayment from debtors. The investor we have found should be in the country by end of the week and it will take at least two months for them to make a decision," he said.

Interfin was placed under curatorship in 2012 after succumbing to debts of more than $80 million. The bank's unsafe and unsound condition was attributed to inadequate capitalisation, concentrated shareholding and high level non-performing insider and related party loans, among other factors that constricted the institution, wholly owned by Interfin Financial Services.

Njanike said the bank's curator Peter Bailey had managed to get judgment in favour of the bank to recover from debtors.

He said judgements in favour of the bank amounted to $63,9 million while provisional sentences obtained amounted to $16,2 million. Debtors whose summonses were suspended after making a payment arrangement with the bank amounted to $3,2 million. He said the amount that had so far been paid in full was $512 183.

"Until all outstanding amounts have been paid, we have a writ of exercise where we can sell properties to get our money. However, we cannot get buyers for the properties we are trying to dispose because the value obtaining on the properties are low, so much that debtors would object," he said.

Interfin Financial services chairman Tim Chiganze expressed hope that the due diligence would culminate into an offer which would revive the bank.

"Most we have received so far attempt to restructure the loan book and turn debt into equity which could affect the shareholders," he said.

Shareholders approved IFS financial statements for 2011 and 2012 which had not been approved because the company had not held AGMs since 2011.
- bh24