Deal Delayed For African Bank Creditors
African Bank, which collapsed in 2014 under a load of bad debt, has delayed publishing its annual financial results until May while talks continue between different tiers of creditors. Results were expected this month.
“While matters delaying the finalisation of the results have substantially been addressed… certain aspects relating to a limited number of outstanding points require further attention from the relevant stakeholders,” the curator said in a statement.
After the bank collapsed last August, the South African government appointed external administrators to oversee a restructuring. The bank’s financial year ended on September 30, 2014.
The curator still expects to release the reviewed results for African Bank for the six months ended 31 March 2015 during June 2015.
South African Reserve Bank Deputy Governor Francois Groepe, who has been facilitating the talks between African Bank’s creditors, is due on Wednesday to report on the latest developments to Parliament’s standing committee on finance, according to a report in Business Day.
The talks are aimed at helping the different classes of debt holders of African Bank to reach a compromise that would see second-tier creditors getting a greater share of the bank’s assets than they would otherwise do.
In terms of the current arrangement, senior creditors who hold debt of about 40 billion rand ($3.28 billion USD) would get about 90 cents on the rand while second-tier creditors, who hold 4 billion rand ($329 million USD), would get almost nothing.
The parliamentary committee is due to adopt the bill on Wednesday after which it will come up for debate in the National Assembly next week.
According to Business Day, Treasury Deputy Director-General Ismail Momoniat told the committee all parties had an interest in a negotiated settlement as this would remove the threat of delays should second-tier creditors contest the bill in court. “I am quite confident that they will reach a settlement, but there is no final deal yet,” he said.
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