|Council mortgages Trafalgar court|
|Saturday, 05 May 2012 00:00|
Harare City has mortgaged Trafalgar Court that houses its workers for a US$6,3 million bank loan to pay salaries. The property is worth US$8,5 million. In the event the city fails to repay the loan, Kingdom Bank will sell the property to recover its money.
Title deeds to the property will stay with the bank for as long as the city wants to use the overdraft facility.
Sometime last year, workers were ordered to open bank accounts with Kingdom on the understanding that salaries will be paid on scheduled pay dates. The city which is owed US$250 million by residents and Government has on several occasions failed to pay its workers on time.
“Council approves the use of title deeds for Trafalgar Court as security for (a) credit facility in the sum of US$6.3 million with Kingdom Bank”.
However, the city argues that the move should not be construed as handing over the residential apartment along Julius Nyerere Way to the bank.
City treasurer Mr Misheck Mubvumbi said the city had always operated a US$4,8 million overdraft with the bank.
He gave the information to the finance and development committee when he sought to increase the overdraft facility to US$6,3 million.
He said a new shareholder with the bank had demanded security for all loans.