South African banking group Absa on Thursday night denied a media report that it is suing the Zambian government for $100-million. However, it confirmed that it had obtained a court injunction against Tazama Pipelines Ltd to prevent the it from
contaminating petroleum feedstock at a Zambian refinery.
Absa said that in May 2002, it had granted a collateralised $65-million revolving credit facility to Trans Sahara Trading (TST) for the express purpose of procuring petroleum feedstock for the Zambian market. The facility was subsequently increased to $100-million on the same terms and conditions.
“Following information that Indeni Petroleum Refinery Company Limited (Indeni) (the refinery in Zambia) may pump their petroleum feedstock into the system which is different in character to the present contents of the pipeline, it became necessary for Absa and TST to apply for an injunction to protect Absa’s security over the petroleum feedstock currently in the pipelines and tanks,” the banking group said in a statement.
“Such injunction was sought against Tazama Pipelines Ltd. (Tazama) and not against the Zambian Government as stated in the newspaper article. The injunction was sought to prevent the introduction of petroleum feedstock which had the potential of contaminating the petroleum feedstock currently in the system.
“The High Court of Zambia granted such temporary injunction on 16 June 2003 against Tazama in favour of Absa and TST. The legal process is currently taking its normal course,” Absa said, adding that the facility in question remained adequately collateralised. – I-Net Bridge