A COMPANY registered in Mauritius operating in Zimbabwe, Blossom View Holdings, is suing a local airliner, Nu Aero trading as Fly Africa Zimbabwe, and its director Hopalong Cassidy Chitariso Mugwagwa, for failing to settle a US$4 million loan extended to them last year.
Blossom View Holdings, through its lawyers Masiya-Sheshe and Associates, issued summons against Fly Africa Zimbabwe and Mugwagwa, seeking confirmation of cancellation of the loan facility and settling of the debt.
Fly Africa was cited as the first defendant while Mugwagwa is the second defendant.
"On or about the 8th of November 2019 the plaintiff and 1st defendant entered into an agreement in terms of which plaintiff extended a loan facility to 1st defendant in the sum of US$4 million. In terms of the term sheet, 1st defendant was to make drawdowns from the US$4 million upon a written request to the complainant.
"It was a material term of the agreement that all disbursements under the said term sheet were at the sole and absolute discretion of the plaintiff (Blossom View Holdings). In terms of the signed term sheet for the loan facility, the first defendant (Nu Aero) undertook to repay the amount drawn down quarterly after the grace period of 60 days.
"The first defendant also agreed and signed that any interest on the loan advanced would be at 10 percent per month," said the Mauritius registered firm.
Summons show that the first drawdown request was made on November 10 last year and further requests of drawdowns were made, resulting in the defendants drawing down US$1 710 622 by July 3 this year, and accumulating an interest of US$1 204 355 bringing the total inclusive of loan and interest to US$2 914 978.
Blossom View said Nu Aero only paid R1 906 000, which was equivalent to US$42 265 on January 10 this year.
The money was channelled towards reduction of interests on the loan facility.
In its court papers, the firm claimed that Nu Aero and Mugwagwa failed to repay the interest on a quarterly basis as they had initially agreed.
It said both Mugwagwa and his airline owe them US$2 914 978 being capital and interest on money drawn down by Nu Aero from the loan facility as at August 31 this year.
"The first and second defendants (Nu Aero and Mugwagwa) have not made any further payments towards liquidating the debt prompting the plaintiff to cancel the loan facility extended to the defendants. Despite demand, the defendants have failed, refused or neglected to pay the whole amount owing and they remain in mora.
"Wherefore plaintiff claims an order confirming cancellation of the loan facility agreement between the parties against the first and second defendants jointly and severally with one paying the other to be absolved.
"That is, payment of US$1 710 622 being the capital debt payment of US$1 204 355 being interest on money drawn down by the defendant from the loan facility as at August 31, 2020, and payment of interest on the total sum owing at the prescribed rate calculated from date of claim to date of full and final payment plus costs on an attorney and client scale," it said.