Bids start pouring in for SME Bank - liquidators

21 July 2017
Author   Eric Nyasha Mhunduru
Prospective buyers have started expressing interest in taking over the troubled SME Bank, barely a week after the lender was placed under provisional liquidation, the Windhoek Observer has learned.
The liquidators of the defunct SME Bank said this week that they had received several inquiries from interested parties who want to buy the institution as a going concern.
“There have been several inquiries telephonically since we were appointed, from banks and companies interested in buying the SME Bank, and yesterday (Monday) we received our first written proposal in that regard,” one of the liquidators, Ian McLaren, said without mentioning any names or the number of potential suitors.
“If we can find somebody with the right credentials since everything has to be approved by the Bank of Namibia, we have a standing agreement with the apex bank that we will make a proposal to them on who we wish to sell the bank to.  
“BoN (Bank of Namibia) will then do their own vetting process and whoever is successful will take over the building, financing and hopefully take over all the staff.”
McLaren told the Windhoek Observer on Tuesday that the main reason they had retrenched employees of the troubled institution, was so that any new buyer would not have to take over liabilities from previous owners.
“We have done this retrenchment now to save money and also because any potential buyer of an old bank would like to start on a clean slate and not with a severance allowance liability from previous owners,” he said.
“It is common knowledge that any new buyers into a liquidated institution would require us to retrench employees and start on a clean recruitment practice once on board,” he added. 
McLaren said potential buyers will only be able to buy SME Bank as a going concern before they conclude their business in 18 months’ time.
He said SME Bank has liabilities worth N$1,2 billion against N$900 million worth of assets.
“If anyone was to walk in here with sufficient credentials we will sell the bank tomorrow morning.”
Quizzed on the amount that the potential buyer would need to fork out for the takeover of the bank, McLaren said that would depend on the intentions of the particular buyer.
“If someone was to say they will pay for liabilities and the assets, then we are talking of a fairly modest amount of about N$30 million; and if someone would want to leave the liabilities with us and continue with the assets only, that will cost them close to N$900 million.”
Regarding repayments to the bank’s investors and depositors, McLaren said all monies owed below N$25,000 will be paid in full in due course and anything above that amount would receive a one-off payment of N$25,000 and the remainder of the amount owed will be paid using the rate of N$0,65 per N$1.   
McLaren also said they were waiting for the department heads and BoN to advise them on the number of workers who should stay and assist with the day-to-day running of the institution.
“We will need fewer people going forward, but we will still need some of the staff for administration purposes, such as the human resources department.
“We will continue with some in that department for as long as we will have some of the staff here working with us and for the processing of packages that the retrenched employees will receive. Everybody will be paid this month’s salary and the notice, which is August, and from there onwards we will be processing their packages, as earlier announced,” he said.
The Master of the High Court last week Tuesday placed SME Bank under provisional liquidators, McLaren and David Bruni, until a final order has been issued.


The Windhoek Observer is an English-language weekly newspaper, published in Namibia by Paragon Investment Holding. It is the country's oldest and largest circulating weekly.

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