CBZ, Tuli in debt agreement

Published: 14 February 2014

CBZ Bank Limited (CBZ) has agreed on a settlement plan with Reserve Bank of Zimbabwe (RBZ)'s subsidiary Tuli Coal (Tuli) following plans to attach the latter's property over an unspecified debt.

The financial institution intended to auction - through Hammer and Tongues (HT) - Tuli's land in the Colne Valley as part of efforts to recover a debt, which it refused to disclose.

"The client has given us a repayment arrangement that will see the debt being paid in six months, hence the sale did not take place," CBZ told Businessdaily.

According to a Government Gazette published on January 31, HT was supposed to auction the land, measuring 4047 square-metres, at Raylton Club in Harare.

This comes as the central bank plans to dispose of its 70 percent stake in Tuli under an exercise to off-load non-core investments and focus on its mandate.

Last year, tenders were invited from registered geologists for the provision of due diligence evaluation of Tuli.

The RBZ said the geological evaluation of Tuli would facilitate the disposal.

Meanwhile, the RBZ has been receiving offers since 2011, including a $40 million bid for the Beitbridge-based coal mine from Singaporean billionaire Sukamto Sia.

With former RBZ governor Gideon Gono previously saying the central bank was struggling to pay retrenchment packages due to liquidity challenges, it has been anticipated that disposal of the 70 percent-owned coal mine - along seven other companies - would free up cash for the exercise.

The multiple Tuli bids also came on the back of reports that one of Saudi billionaire Adel Aujan's former country representatives once eyed the on-sale asset.

Analysts say, with vast coal deposits, the southern Zimbabwe mine is a hugely promising asset for thermal power investors.

Of the eight non-core subsidiaries being off-loaded by RBZ, only Tractive Power Holdings Limited has been transferred to Zimplow.

The central bank's 67 percent stake in fast-moving consumer goods company Cairns Foods Ltd has reportedly been acquired by South Africa-based Vasari Global Holdings.

As things stand, the sale of several other companies including Homelink (Private) Limited and bio-diesel operator Transload (Private) Limited is still pending, although the central bank had been hoping to use some of the proceeds to recapitalise and settle debts.
- dailynews