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Land Bank receives R1.5bn from government, plans to pay creditors

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Land Bank receives R1.5bn from government, plans to pay creditors

22nd September 2020

By: News24Wire

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The Land and Agricultural Development Bank of South Africa has received the first tranche of a R3-billion equity injection from government, it said in a notice to shareholders on Tuesday.

In his supplementary budget in June, Finance Minister Tito Mboweni announced a R3-billion equity injection to the bank as part of its recapitalisation, this as it was facing a liquidity crunch earlier in the year brought on by credit downgrades.

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The bank on September 11 received R1.5-billion from government, and said it expects the second tranche of payments by 30 September.

"An amount of R500-million has been allocated for an upcoming capital amortisation payments to an international development finance institution due during September 2020," the notice read.

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The remaining R1-billion has been set aside and will be retained for the purpose of repaying creditors.

The Land Bank expects to pay an amount equal to 5% of the total capital amount owing to each of its financial creditor funders, the notice read.

Any lender who receives a capital amortisation payment from Land Bank before 1 October 2020 will not be entitled to the Part Capital Reduction Payment.

Most recently Standard Chartered has launched legal proceedings to recover its money from the Land Bank, Fin24 previously reported. Standard Chartered had arranged a $300-million 10-year loan facility with Land Bank in 2017.

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