Standard Chartered Bank takes Land Bank to court

JOHANNESBURG - One of Land Bank's lenders, Standard Chartered Bank, has taken the state-owned development finance institution to court to try to recover its money. The Land Bank has been facing liquidity woes for most of this year since Moody's downgraded its global credit rating ratings to junk. The bank has not been able to service a large amount of its debt. While National Treasury announced in June that it will be getting R3 billion in recapitalisation, since that capital injection had to be tabled in Parliament as part of the Adjustments Appropriation Bill that was only passed on August 4, the bank was not able to make interest payments in July. It resumed payments on August 11, but Standard Chartered Bank served it with legal papers on August 18, 2020. "Land Bank is working with its advisers and will be opposing the application. Land Bank continues to engage with its financial creditors as it works towards the Liability Solution," wrote the Land Bank on Tuesday. Standard Chartered arranged a $300 million 10- year loan facility for the Land Bank in 2017. The loan was backed by a guarantee from the World Bank's Multilateral Investment Guarantee Agency. National Treasury has previously said that during engagements with the Land Bank lenders, the state institutions made appeals to those owed not to exercise rights they may have to call on debt that is at risk of default. The Land Bank is currently working on a solution – termed the Liability Solution – to address its cross defaults and extend the term of all funding that has matured or will mature in the next 12 months.