Shefer facilitation payment reduced to 1,3 percent
SOUTH African businessman Mr Niko Shefer, who facilitated the $206 million deal for Zinara to refurbish the PlumtreeMutare Highway, yesterday said he has renegotiated his facilitation fee from two to 1,3 percent.
His office in South Africa also clarified the role it played for Zinara to access the loan during trying times for Zimbabwe.
“Mr Shefer was instrumental in securing the opportunity for Zinara to develop the Plumtree -Mutare Highway at a time when the debt funding of this magnitude was at best challenging to secure for projects of this nature for Zimbabwe,” said an official from his office.
“The loans, fees and insurances secured by Mr Shefer for this specific project amounted to $225 000 000.
“In transactions of this nature, particularly in the trying economic climate facing the world markets at the time, as well as the illegal sanctions imposed on Zimbabwe by Western financial institutions, success fees of 7,5 percent and 10 percent of the total capital amount raised are considered reasonable and payable in one lump sum upfront.
“Mr Shefer was requested by the management of Zinara at the time to defer the settlement of the agreed upon success fees over the tenure of the loan that is 10 years, which commercially and over the normal course of any business would obligate Mr Shefer to assume the settlement risk over the phased life of the project.
“It was agreed, therefore that considering there is an interest cost to such a deferment as well as a risk component, that Mr Shefer would be entitled to a settlement amounting to two percent per annum of the total capital debt for the tenure of the loan.
“Due to the difficult economic situation in Zimbabwe, the CEO of Zinara requested his staff to negotiate a further alleviation of this obligation with Mr Shefer and he agreed to reduce the percentage to 1,3 percent per annum for the period outstanding on the tenure of the loan.”
Confirmation was also obtained by this paper that the settlements made to FNB were not to any of Mr Shefer’s accounts but Infralink’s own Debt Reserve accounts.
The official further stated that the money that Zinara deposited in the FNB account in South Africa was for Infralink’s debt reserve accounts and operational accounts for the purpose of settling their debt obligations to the DBSA.