Renaissance deal blocked

Africa First Renaissance Corporation Limited – until it clears a US$5,7million debt to Econet Wireless.
Econet had filed an urgent chamber application after it learnt that several firms were jostling to bail out RFHL to gain access to the Afre properties.

Econet applied for the order to protect its shares from potential purchasers on the basis that the stake had already been ceded to it over a US$5,7 million debt.
High Court judge Justice Susan Mavangira granted the application. She ordered the share certificates to be surrendered to the Registrar of the Master of High Court for safekeeping, pending October 30 when RFHL is expected to clear the debt.

According to the agreement between RFHL and Econet, the shares were ceded to Econet.
But in the event the debtor failed to clear the debt by the end of October, the network service provider would take over the shares.

In her ruling, Justice Mavangira interdicted RFHL from transferring or disposing of the shareholding.
“The second respondent (Renaissance Merchant Bank) be and is hereby directed to forthwith deposit with the Registrar or Master of the High Court, Harare, Share Certificates of the First respondent in Africa First Renaissance Corporation Limited.

“The first respondent be and is hereby interdicted from transferring, disposing of or encumbering in any other way, their shareholding in Africa First Renaissance Corporation Limited, pending the finalisation of this application,” read the order.

Econet argues that the shareholding had already been ceded to Econet.
The company said it understood that several other firms were contemplating a bailout of the troubled institution to gain access to the valuable properties in Afre.

According to the papers filed by Harare lawyer Mr Harrison Nkomo of Mtetwa and Nyambirai law firm, Econet chief executive Mr Douglas Mboweni claimed RBZ issued to Econet foreign currency bonds with a face value of US$2 392 044 with a tenure of six months.

RFHL is alleged to have requested Econet to cede the bonds to it on stated terms and conditions.
Despite the maturity of the bonds, RFHL had failed to settle the amounts on the due dates, it is claimed in the court papers.

Between February 15 2009 and May 8 2011, Econet deposited with Renaissance Merchant Bank a cumulative US$3,1 million specifically for settlement of Econet’s external creditors who included its suppliers.
RMB reportedly failed to carry out the transaction and instead converted the money to its own use.

Econet later gave various instructions to RMB, among them to invest US$2 million for 30 days and US$500 000 for one year between March 2 and 3 this year, but nothing was done.
In all cases, it is claimed RFHL failed to repay the invested funds, including interest
Upon demand, it is stated in the court papers that RFHL acknowledged indebtedness to the tune of US$5,7 million and secured the debt by ceding its 30 percent shareholding in Afre.

“Although cession was effected on April 25 2011, the first respondent (RFHL) was given up to October 30 2011 to settle the debt,” read the papers.
Econet considered reports that the RFHL and RMB might face liquidation and that several companies were eyeing the 30 percent stake in Afre and were showing interest in rescuing the troubled firms.
Meanwhile, Econet lawyers have written to the judge for the amendment of the order to replace RMB with the curator Mr Reggie Saruchera.

Mr Saruchera was appointed when the bank was placed under curatorship recently.