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Sunday, 28 September 2014 13:34

Government Stalls Tetrad Bank Takeover Bid By Russians

By Kudzai Kuwaza in Harare

HARARE, Sept 28, 2014 (Business Digest) -- The takeover of Tetrad Investment Holdings by a Russian investment group -- Horizon Capital Consortium (HCC) -- is yet to be consummated as the consortium haggles with government over key investments in various sectors in the economy, including mining and power generation ventures, businessdigest has established.

 

HCC led by businessman Sergey Pokusaev, acquired a controlling equity stake in the diversified financial company, which owns Tetrad Investment Bank (TIB), in a deal worth $50 million in May 2014.

 

Sources told Business Digest that the negotiations between HCC and Tetrad had been successfully concluded but is being delayed by HCC's protracted negotiations with government over the interests in various business portfolios each as that include infrastructure development, mining and power generation.

 

It is not clear whether the consortium was involved in the business agreements between Russia and Zimbabwe this week. A $3 billion platinum mining project was commissioned in Darwendale. The high powered Russian delegation included the country's foreign minister Sergei Lavrov.

 

"The primary interest of HCC, which is strongly linked to several government officials, is not in acquiring Tetrad Holdings but in other business ventures in the country involving infrastructure rehabilitation, mining and power generation. If they do not succeed in getting agreements in those areas, they might pull of the deal with Tetrad," a source revealed.

 

Meanwhile, Finance Bank of Zambia Ltd, which were also interested in acquiring a controlling equity stake in Tetrad before losing out to HCC, is watching developments closely and are ready to move in should the Russians opt out of the deal, sources revealed.

 

Tetrad met with creditors in which the troubled financial institution successfully pushed for a deferment of claims pending the finalisation of a recapitalisation exercise. Creditors and depositors of the bank, last month, voted in favour of a moratorium to defer any payments to October 31 while awaiting its takeover by HCC. Out of a total of 3450 ballots, 553 were used both in person and through proxy.

 

The 541 in favour represented creditors with shares worth $46 million in the bank while the 12 that voted against hold $8,2 million. Business Digest revealed in june that Pokusaev's Horizon Capital Consortium (HCC) had put on hold plans to turn TIB into a commercial bank and will stick with investment banking specialising in mining and infrastructure development.

 

The bank's thrust, according to the source said, would be mining and infrastructure development. Zimbabwe needs $10 billion for infrastructure development, while its mining sector has a huge upside potential. Pokusaev's links to Eastern European capital are expected to help mobilise lines of credit. Early this year, TIB concluded a voluntary retrenchment exercise that saw 40 members of staff accepting the offer in line with the Russian businessman's plan to have a leaner bank.

 

The institution's headcount is now around 100. According to a well placed source, the new shareholder is not looking at having "serious" branch presence in the market and is likely to retain current management. The deal is expected to improve the bank's capital position and unlock lines of credit for the institution. Eugene Mlambo, group CEO of Tetrad Investment Holdings Ltd, was not available for comment.

(This story was originally published by Business Digest)

 

 
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