Maravi

(NEWZIMBABWE) Companies face closure as banks pounce
28/10/2013 00:00:00
by Staff Reporter

COMMENT - More neoliberal wisdom from Eric Bloch. - MrK

SOME 13 Bulawayo companies and seven local business people are set to lose property worth millions of dollars as banks take action after they defaulted on loans and various other facilities.

The development comes after some pressure groups called on the government to consider imposing a moratorium against company litigations to help the country’s struggling economy recover. They warned that the costly litigations could result in more company closures and the loss of jobs.

But Bankers Association of Zimbabwe (BAZ) past-president John Mushayavanu said financial institutions were forced to resort to attaching property as a last option.

“It is difficult to comment on this issue because I do not know the circumstances around the matter but I do not think this is a banking issue,” he said.
“Banks discuss loan payment terms with their clients and under normal circumstances attaching property is the last resort.”

Bulawayo Real Estate announced Monday that it had been granted High Court authority to auction movable and immovable property worth millions of dollars belonging to several companies in the city.

The auction, set for November 8, will see the disposal of property such as buildings, housing stands, staff quarters, carports and cottages, pieces of land, boreholes, swimming pools and outbuildings.

Companies affected include Hodard, Summer Steel Works, Merspin Limited, Troshy Investment, Finneston Limited, Seddon Investment, Macasave Investment, Leatherware and Rubber Industries, Falcon Minerals, PMM Plastics as well as E. R Corporate Wear.

The companies owe various amounts to financial institutions that include Renaissance Merchant Bank, Premier Bank Corporation, Interfin Merchant Bank, Infrastructure Development Bank of Zimbabwe (IDBZ), POSB, ZB Bank, NMB Bank, Ecobank Zimbabwe, CBZ Bank, MBCA Bank and Cabs.
Bulawayo-based economic commentator, Eric Bloch, warned that the auctions could lead to more company closures.

“Most companies are failing to service their loans because they have no money. Businesses are undercapitalised and considering the state of the economy there is absence of funding from banks,” he said.

“The implication is that this will result in closure of many companies. The companies will be liquidated and that means loss of jobs for many.

“The banks have no choice and the only way to protect the companies is to bring more investment to the companies and bring them back to their feet.”

The country’s economy is struggling to recover from a ten-year recession which saw many companies either closing shop or scaling down their operations with Bulawayo among the worst affected.

Labels: ERIC BLOCH, MDC, NEOLIBERALISM

posted by MrK @ 5:00 PM