New deal for MKM

New deal for MKM

MASERU – MKM liquidators will soon approach creditors of the collapsed Ponzi scheme with a settlement deal that does not involve paying out cash.
Instead the liquidators want the creditors to accept shares in exchange for the monies owed. So instead of being paid cash the creditors will own shares in a new company that will be created out of the sale of the remaining MKM properties.

The liquidators have identified about 20 MKM properties across all districts that will be the main assets of the new company.
The liquidators will this week seek a High Court order to reorganise the company.
If the High Court grants the order the liquidators will approach the Master of High Court to approve the arrangement.

Creditors will also approve the deal to convert their monies into shares before the reorganisation is done. The finer details of how much each share in the new company is worth are yet to be thrashed out.

Sources close to the issue told thepost this week that the liquidators believe the reorganisation is the only way through which the creditors can recoup some of their losses. The company will be run by a board that will be elected by the creditors-cum-shareholders.
Once the company has been handed over the shareholders can decide whether to rent out the buildings or sell them.

thepost can reveal that little remains of the M115 million that was raised from the sale of MKM’s three properties last May.
The bulk of the money, a close source said, was used to pay contractors MKM owed for the construction of some of the buildings.
A significant chunk is said to have been used pay other service providers MKM owed. Then there were the fees and commissions for liquidators, auditors, lawyers and computer experts.

Attorney Qhalehang Letsika, one of the liquidators, said he could not reveal anything about the reorganisation proposal.
He however confirmed that much of what has been raised so far has been used to pay suppliers and service providers.
The Central Bank of Lesotho closed MKM in 2007 when it owed about M400 million to half a million creditors.
Since then the matter has dragged on in the courts with MKM directors trying to block the liquidation.

Staff Reporter

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