06 Dec 2022

'Old African Bank' RDS starts paying more creditors' claims

Londiwe Buthelezi

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The curator of the old African Bank has settled the claims of the first group of creditors and has started paying the next set of creditors on the line, disbursing R214 million.

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Residual Debt Services (RDS) has fully settled what it owed its senior unsecured stub instrument holders, with some handsome interest.

RDS emerged from the split of African Bank Limited (ABIL) operations into a "good" and "bad" bank when it went into curatorship in 2014. A "bad bank" typically houses high-risk or unpaid loans. The company has settled senior unsecured stub instrument holders' claims totalling R7.1 billion, almost doubling their investment over six years.

The settlement came after RDS negotiated with African Bank to reduce its indemnity reserve from R3 billion to R500 million.

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