Liquidation is meant to ensure that, at the very least, justice is done to investor funds when poor administration or decisions lead to the collapse of a business.
However, African Bank investors view their situation differently, with the Bank Amendment Bill which will move through parliament in 2015. The legislation grants the administrator of a failed bank with the power to sell assets and rejig capital assets without consulting investors.
Investors, especially bond holders, fear that this regulation might cost them their money as it might limit reduce their rights as creditors.
However, calming investors’ nerves, David Gard of PwC London, part of the turnaround team, views things differently. He is of the opinion that the move just ensures that the process of crystal clear.
“To be honest, if I am the senior creditor I would see this in a context that it provides a clear ability for us (as curators) to deliver the deal. And they will be able to move forward with their investments.”