Auction companies are booming in Zimbabwe as companies and individuals – including Tongaat Hulett CEO Sydney Mutsambiwa and Mzi Khumalo’s Metallon Corporation – default on loan payments or other financial obligations.
The booming auctioning industry is unique in a country where companies in other sectors such as mining, construction and manufacturing are struggling for survival owing to foreign currency shortages.
Various properties, including hotels, residential and commercial stands and mining equipment, have been going under the hammer in the past few weeks. These include the Courtney Hotel in Harare and various housing properties being auctioned by banks.
Those set to lose properties include Tongaat Hulett chief executive officer, Sydney Mutsambiwa, whose Euro Leopard 650 Tractor is being sold by public auction by the Sanyati Rural District Council. Mutsambiwa and seven others will have their properties and belongings auctioned by the council on December 1, 2018.
“We auction all sorts of properties and equipment, property and vehicles, and even household and office goods. There has been an increase, especially since the start of the second half of the year,” said a receptionist at a Harare auction company.
Earlier this month, Metallon Gold’s Mazowe mine had its underground hoist and main plant auctioned on behalf of the Zimbabwe Electricity Transmission And Distribution Company. Various banks in Zimbabwe have also been auctioning off properties over loan defaults, giving rise to a booming auctioning industry in the country.
Zimbabwe’s economy has continued to balk under worsening conditions, although the country has started to informally re-dollarise, as the bond notes also accepted as legal tender continue to lose value.
Some companies have also been struggling to pay employees on time, as others have accrued unsustainable backlogs. Local reports show that Courtney Hotel has been dragged into litigation by its employees.
A notice in local press, calling for interested bidders, refers to “a matter between Jameson Chinyan’anya and 36 others vs. Courtney Hotel Private Limited” in which a “certain piece of land situated in the district of Salisbury (Harare) called Stand 15129, also known as Courtney Hotel,” is being auctioned off.
Even bigger companies, such as Meikles Limited – which has a partnership with Pick ‘n Pay in Zimbabwe’s TM Supermarkets – have also been defaulting on loans. In September, Meikles said it was now subject to litigation over two overdue loans, owed to government related finance institutions and amounting to $5m.