CAPS Holdings creditors, including two financial institutions, have proposed a scheme of arrangement to save the fallen pharmaceutical giant from collapse, sources close to the developments said on Monday.
CAPS, which collapsed over three years ago under a cloud of alleged mismanagement, debt and undercapitalisation, owes CBZ Bank and FBC Bank nearly $6,5 million, among others.
The sources told The Source that CBZ Bank, which last year made several unsuccessful attempts to auction CAPS head office to recover its debt, is now considering a new plan to save the company, which includes converting the debt into equity.
“The bank is proposing a programme almost similar to that of Lobels. The creditors felt that while it was important to recover the debt through an auction, it would be better to save the former pharmaceutical giant,” said a source close to the developments.
Two years ago, a consortium of banks – CBZ, NMB, FBC, Capital Bank and Metropolitan Bank – under the vehicle Altiwave saved Lobels from collapse with a plan that gave them ownership of the bakery after it failed to repay its debts.
CBZ finance director Never Nyemudzo did not respond to questions emailed to him on Monday morning.
Last October the High Court ordered the sale of CAPS’ head office through a private treaty, after CBZ opposed the sale of the property to Chinese buyers who had a $1,5 million bid accepted.Advertisement