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Business Reporter
Tetrad Investment Bank says there have been delays in the implementation of its recapitalisation process due to outstanding certain regulatory approvals relating to the way the transaction is structured.
This has forced the bank to make contingency measures to prevent its restless creditors from making further claims to recover what is owed to them before completion of the recapitalisation process.

“There has been a delay in implementing the recapitalisation process because certain regulatory approvals and or authorisations remain outstanding in respect of the transaction as structured,” the bank said in a statement released on Friday last week.

The bank said the outstanding issues were being attended to by, in the main, the investor and their local advisors in order to close the deal.
In March this year, Tetrad Bank entered into an investment transaction agreement with an investor.  The investor agreed to recapitalize the Bank in accordance with laws and regulations of Zimbabwe.

Last year, the Reserve Bank raised minimum capital requirements for commercial and merchant banks to $100 million from $12,5 million and $10 million.
Banks were required to have met $25 million capitalization by December last year  and submit plans on how they intend to comply with the $100 million minimum capital threshold by end of 2020.

Russian investor Horizon Capital Consortium is angling for a controlling stake in Tetrad in a deal said to be worth around $50 million. Foreign investors have been taking advantage of the tight liquidity environment in Zimbabwe to pounce on discounted assets.

According to the bank, it has been considered prudent, in light of the legal risk the bank was exposed to, to engage all the creditors in order to seek a moratorium in respect of certain obligations to them.

To that end, Tetrad Investment Bank has applied for and obtained a High Court Order to convene a Scheme Meeting with its creditors and depositors in terms of Section 191 of the Companies Act.

Retired Justice George Smith will chair the meeting and Deloittes Chartered Accountants will be scrutinisers in respect of the bank’s proposals. The scheme of arrangement will be held on Friday this week.

The meeting will, among other things, serve to explain the current state of the Bank pursuant to the investment transaction with Horizons Capital Consortium Holdings Limited and provide an update regarding the dates by which creditors may expect to be paid in full.

Tetrad said it took the measures to avoid having to consider more
drastic alternatives, pending delayed completion of the investment transaction.

Last month, the High Court issued a default judgment against the bank after its failure to honour call deposits amounting to about $1,1 million in favour of real estate
company HP Nursten & Company.

In June, National Social Security Authority was given the green light to attach Tetrad property to recover about $5 million by the bank.
In the half year ended March 31 2014, Tetrad Bank’s losses increased to $10 million from $3,89 million in the same period last year.