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AfrAsia creditors and members last week approved the disposal of MicroKing to a consortium of two foreign investors that is expected to inject $22 million into the micro-finance institution.

Speaking at the first creditors meeting, liquidation agent Reggie Saruchera of Grant Thornton said creditors will recover $4 million from the disposal of the viable subsidiary.

“The net asset of value of MicroKing is $4 million after writing off a $3,6 million deposit held by the bank. The Deposit Protection Board recently invited bids for the disposal of Micro-King and we received four bids for the disposal.

“A consortium of two foreign investors put in a bid for $22 million, of which $4,4 million was for the consideration payable to the bank as the shareholder. The transaction should be concluded by October 2015,” he said.

Creditors also saved AfrAsia Capital Management (ACM) from liquidation by allowing the liquidator to participate in a scheme of arrangement to recover the net asset value held by ACM amounting to $409 139.

In the scheme of arrangement, clients of ACM that are owed $4,5 million through deposits locked in the bank will convert their debt to equity and assume ownership of ACM.

In turn, the bank will relinquish its entire shareholding for $425 000, thereby allowing the company to carry on operating, assuming a new identity and shareholding structure that includes management.

Mr Saruchera said Grant Thornton hopes to set off all liabilities, thereby ensuring that Afrasia depositors recover their balances which in total amount to $42,6 million. Liabilities which totalled $59 million include statutory obligations to the tune of $3 million, $7 million owed to Afreximbank, $2,5 million owed to sundry creditors and $3 million employee related costs.

Total assets of the bank amount to $40 million, leaving a net liability of $19 million. Mr Saruchera said the liquidator will try and recover $23 million provided as impairment loan allowances. According to Mr Saruchera’s report, the bank’s NPL ratio stood at 82 percent as at 18 March 2015 against gross loans of $46 million.

Secured amounts include Lunar Chickens ($8 million), Monachrome ($4 million), Zimglass ($3,8 million) and The Wattle Company ($3 million), while unsecured loans include Rio Zim ($3,5 million), Drummond Ranching ($2,5 million) and Zimbabwe Diamond Technology Centre ($1,6 million). – Wires.