
Africa Guarantee Fund – designed and funded by the African
Development Bank in partnership with Danish and Spanish investors – has
withdrawn its investment as the guarantor of investment notes issued by Zimbabwe’s
Untu Capital.
The notes are listed on the Financial Securities Exchange
in Zimbabwe. Untu Capital said the Africa Guarantee Fund had cited the
current economic environment and failure to remit their guarantee fees as a
reason for withdrawing. Other companies such as British American Tobacco and
AB InBev have also failed to remit their dividends from the cash parched
southern African country.
“The company has so far failed to secure foreign currency
allocations to remit the Guarantee Fees,” Untu said. “The company will continue
to engage the Reserve Bank of Zimbabwe through its bankers for an allocation of
forex for the amounts due on the AGF Guarantee.”
It is not immediately clear how much is outstanding in
guarantee fees. Zimbabwe has been facing worsening foreign currency
shortages over the past few years and this has crippled imports of key supplies
such as fuel, medicines and raw materials for companies.
Foreign companies have limited funding lines for local
subsidiaries while capital investments have been delayed.
“Nothing has changed and it’s getting riskier for the SA
companies to keep advancing funding facilities,” said an executive in a South
African-controlled company.
“As things stand, there has been no improvement on the
foreign currency situation and the impact will manifest when local subsidiaries
fail to sustain operations.”
The Zimbabwe unit of Nampak recently said it was limiting
its exposure as a result of uncertainties in the country.
The group said its South African holding company had
limited support at the commencement of the third quarter, thereby curtailing
escalating exposure to Zimbabwe. IOL
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