eBusiness Weekly
Business Writer
Business tycoon, Simon Rudland, through his family investment vehicle, is reportedly angling to take over the defunct Tetrad Investment Bank (TIB), Business Weekly can reveal.
The businessman, with an interest in tobacco alongside an unnamed institutional investor, is said to have expressed willingness to take over and revive the bank, nearly a decade after it was closed and placed under provisional liquidation.
The latest development comes after the High Court on December 16 last year, barred major shareholders from holding an extraordinary general meeting (EGM), which sought approvals to surrender the license and transform the bank into a property management firm.
The bank is estimated to have a US$13 million asset portfolio.
The directors also wanted to remain in charge of the property money-spinning business.
A minority shareholder, under the TFS Management Company, applied to High Court to interdict the EGM, objecting to the resolution to transform the bank into a property firm.
TFS, which manages three fund assets, owns about 13 percent of Tetrad Investment Bank.
The asset firm gained a stake in Tetrad after a scheme of arrangement to cancel the debt in exchange for ownership.
TIB has issued a circular hinting to a renewed attempt to hold an EGM in early 2023.
“Rudland family is leading a consortium that has shown interest in buying the bank and initial assessments show they do have the financial capacity,” said a person familiar with the development, who declined to be named because the matter is still private.
Another source said the “commitment” from the Rudland family “is above suspicion.”
Calls seeking comment from Rudland were not answered.
Efforts to get a comment from TIB directors were also fruitless.
Reserve Bank of Zimbabwe Governor Dr John Mangudya, told Business Weekly in an interview last week that the central bank will only act once the shareholders indicate intention to re-open.
“If they feel they are ready to open, the RBZ is prepared to conduct pre-opening inspections.”
No comment could be immediately owned from TIB.
TIB has about 525 million shares in issue translating to a net asset value (NAV) of $1,39 billion, and a NAV per share of $2,65. At the interbank rate of 88 as on 30 September 2021, this equates to a NAV of US$16 million, and a NAV per share of US$0,03.
This means that had the company’s assets at book value liquidated 30 September 2021, each shareholder would have received US$0,03 per share.
TIB’s operational change proposal reports an estimated NAV of US$13,7 million which translates to US$0,026 per share for the period ended 30 September 2022 which is 14 percent lower than what was reported in 2021, according to an analysis by a local financial advisory company.
The analysis is based on historically reported property book values and not current market values, hence the need for 2022 financial statements and an independent valuation of the property portfolio to be made available “before any decisions are made on the future of the company.”
Eleven days before the EGM, the TIB acting chairman, Appollinaire Ndorukwigira, resigned because he strongly objected to the agenda of the EGM, particularly the proposal to transform the bank into a property management company.
In his resignation letter, Ndorukwigira said: “The meeting of the board which took place on December 1 2022 at the Pavilion, St George’s College (Harare), refers.
“In that meeting, I did strongly object to the proposed agenda of the Extraordinary General Meeting of the company as well as the proposed draft resolution to recommend the surrender of the banking licence and the proposed conversion of Tetrad into a property management company. As the records of the meeting would show, I did oppose that draft resolution on the basis that the proposed new business orientation is based on insufficient technical and financial data demonstrating the viability of the new property management company.
“The executive management has failed to produce a credible business plan that would clearly demonstrate that shareholders would be better off by adopting the property management business model. The documentation sent to shareholders does not show the type of activities to be undertaken to improve the revenues of the company, other than collection of rental income of the current property portfolio over the next five years.” As a result of the seemingly “dodgy and self-serving proposal,” he opposed to conversion of the bank to a property firm.
TIB was incorporated on 12 June 1995 as Tetrad Securities Limited. The institution commenced operations in 1996 after obtaining a licence to operate as a discount house in terms of the Banking Act. Tetrad Securities Limited’s discount house licence was converted to a merchant banking licence on 6 March 2009.
But TIB’s licence was withdrawn by the Reserve Bank of Zimbabwe in 2014. In 2015, the bank was then placed under provisional liquidation, while it looked for a new investor.
Its liabilities exceeded assets by US$1,5 million.
Initially, Tetrad Holdings, established in 1995, comprised financial services (a merchant bank, TIB; asset management entity, TFS Management Company; a microfinance unit, Multiridge Finance; and an insurance company, Tobacco Hail Insurance), a mining and mineral resource processing company, Tetrad Resources; a property development and management firm, Tetrad Properties; and other interests.
However, when the group closed in 2014, it was broken into different entities. This left the bank, TIB, in the hands of depositors after a debt-to-equity scheme of arrangement.
