AN INTERNATIONAL company specialised in buying off depressed debts has written to Government requesting to purchase the K14 million debt which shareholders of the defunct Zambian Airways owe the Development Bank of Zambia (DBZ).
According to a letter written on behalf of the company by the law firm Lewis Nathan Mosho obtained yesterday, the institution wants to buy off the DBZ loan together with the associated interests and follow the borrowers.
The letter, is dated April 2, 2015, is addressed to President Lungu’s special assistant for project monitoring and implementation, Lucky Mulusa.
“Our international clients specialised in buying off depressed debts have instructed us to explore with you the possibility of buying off from DBZ the K14 million loan together with associated DBZ interests arising thereby so that they pay off DBZ and follow the borrower and its associates,” lawyer Lewis Mosho said.
Mr Mosho said Government should evaluate this possibility and advise whether DBZ may engage with his clients.
He said his law firm, following instructions dated October 31, 2008, conducted a detailed legal due diligence on the K14 million loan obtained by Zambian Airways from DBZ.
Mr Mosho said the law firm rendered a due diligence report to DBZ dated December 17, 2008.
And Mr Mulusa said in an interview that he is in receipt of the letter from Mosho and will take it to DBZ management for consideration this week.
“Yes, I am in receipt of such a letter regarding the proposal on DBZ. DBZ has its board and management where this letter will be taken for their consideration but this is an interesting proposal,” he said.
Mr Mulusa said the proposal is an interesting idea to evaluate because DBZ needs to recover its money and give to other institutions willing to invest in the development of the economy.
He said DBZ should recover its money but the court process should be left to proceed so that legal issues in the DBZ case are interpreted.
This is a win-win situation. The people get their money back and a private debt investor follows up the debt with JCN and the Post. What more can we ask for!
But Ricky what do you have to say about the cost of risk the government will be transfering to this so called international company via the purchase?? In a normal country, this debt should have been collected by now…why trade a debt that is straight forward??? I believe these guys will proposal some silly price like 6 million for it!! NO, the government should not sale the debt but instead use the law to its full extent (exactly what this so called int’ company wants to do) and collect!
@Prince – These guys have offered to buy the debt for K14 million (rebased) plus the accrued interest to date. I agree the debt should have long been collected but the reality is it has not been collected.
As for the risk being transferred to the company, that is really up to the company to work it out. They should have worked out what the risk of their failure to collect it is before making the offer.
In the absence of such an offer, the DBZ should use all means at their disposal to collect from the debtors – including pursuing the personal guarantors, it those were the terms of the loan.
Ricky, you seem not to understand how the corporate world operates with regards to depressed debts. Do a bit of research and come back to debate the issue with a more informed argument. For now, just know that a depressed debt is revalued by the bidder, and it is much lower than the face value. In other words this type of business is only engaged in when the principle deems it almost impossible to recover the debt, hence better to get some returns or reduce the lose in other words.
So its true. Who are the international company?
This should be explain in simple language… so if we agree with it, we know exactly what we are signing up to. This is similar to the vulture arrangements that were agreed to during Chiluba’s reign
Buy n be ready for a very touch legal battle
We are yet to see the results.
We seem to be policising everything. The same Lawyer was prosecuting Nchito in Chongwe. He again wanted to be party to the Tribunal. He was a a lawyer to RB. What is really the game plan. REVENGE. We might end up like Rwanda.
I think this international firm is non-existent. Why did they write now, why didn’t they write to President Sata? This debt id not new.
I suspect that the firm is simply Mutembo’s allies (e.g. the Finance Bank, masquerading as an international company) who just want to save Mutembo from disgrace. This is a case of money laundering. No legitimate firm can buy debt when the defaulters are disclaiming responsibility.
If I were President Lungu, I would take this with a pinch of salt.
This is not new. You folks who’ve read enough have heard of the vulture funds and the Donegal saga. The UNIPISTS at one time owed Bulgaria or some such Eastern European country a loan of $500,000 to 1 million dollars. A company in Western Europe bought off this loan, meaning paid Bulgaria their money and aggressively pursued the Zambian government to pay up and the latter paid through their (oh sorry, our) noses as the interest had risen by over 2000%. So JCN better watch out for the financial tsunami on their horizons, should this materialize.
That was debt owed to a govt from another govt…not a company. This is a complex matter.
Don’t believe what Poverty stricken men like Mulusa yaps.All this is to fix Mutembo and Meembe .
After paying then will grab o properties frm Meembe including the post so that no anti news for PF.
Mulusa is PF now.
Cry my beloved country.
U can’t even hear Mulenga Sata in the news just pictures welcoming
the auctioner
This is big business in Europe if this is genuine company…this firm has probably done it’s due diligence and concluded it can recoup debt plus interest and costs. But sale debt at what cost? half price? A debt that is being disputed in Zambian courts…too risky if you ask me.
Government should be very much careful when dealing with a makuluku
There is a mistaken belief here by most that the debt will be bought at face value (plus accumulated interest?) This is patently false as the vulture fund, in this case Mosho and his collaborators will buy it at a massive discount and then go for Mmembe et al for the full value plus interest. That is why these are called vulture funds or vultures in short. Zambia has experienced this before with the HIPC debt which vultures bought cheap and Zambia ended up paying full value of the debt. What may be worrying is that these guys have probably agreed on the price, which could be as little as say K3 billion but will end up with whooping profits some of which may be shared with their collaborators. This could turn out to be a very large scam in which DBZ and Zambia will be massively swindled.
Mmembe and Mutembo must plan properly which way to go.
A drag net is being cast.
Always dealing with Zambian dunderheads should not give Mutembo false confidence.
The intelligent manager said we will collect the DBZ money. But did not say how.
This is very interesting.
It is better to pay now and close the case or counter attack if you have big balls between your legs.
Damages may be incurred by the weak group.
It is a matter of finding right players to counter- attack.
Our concern is the future of the post newspaper. But money should be paid back.
Spot on Deep Thinker.By the way where is this company based? I think it is either Chine or India.You can’t find such companies anywhere else.
Please don’t give them! Vultures!! They will turn around and vulture you! Don’t forget what they did to Zambia with Romanian debt which they bought and took us to a UK court. They don’t mean well. Vulture fund! Pleasssssseeee!
If this company is going to pay all the billions plus interest, we shouldn’t care if its the devil himself, fred Membe and his cartel should be eliminated by all means. These *****s have controlled the presidency with impunity. That money is tax payer s money,why should it end up in Membe ‘s and nchito’s pockets? To add insult they want to to run their mega companies without paying tax when a small shop pays tax and levies? God forbid!!!