HARARE – The Harare Municipal Medical Aid Society (HMMAS) is being sued by Met Bank Ltd for failing to repay a loan of $1 million.

According to the lawsuit filed by Met Bank, HMMAS failed to pay back $1 037 283, 37 by May last year, in terms of the agreement.

“On or about July 4, 2016 and at Harare, the plaintiff (Met Bank) and the defendant (HMMAS) entered into a written banking facilities agreement in terms of which the plaintiff granted to the defendant a debt discounting backed-working capital facility in the gross debt sum of $1 811 468, 20 and net amount of $1 358 601, 23,” the court heard.

According to court papers, the loan facility would be repayable in equal monthly instalments of $200 000 per month, which translated to $50 000 per week and would expire on May 31, 2017.

It was also a term of the agreement that upon the expiry of the loan facility, any outstanding amount would become due and payable.

The agreement further stated: “that interest on the facility would be charged at the aggregate of the ruling bank’s base rate and a margin thereon at 15 percent per annum which was subject to change from time to time in line with the prevailing market conditions as advised by the bank.

“That each sum that was not paid when due, would attract default interest over and above the interest…at the rate of 18 percent per annum calculated from the date on which the sum fell due to the date on which it was actually paid”.

HMMAS is said to have breached the agreement by failing to pay the amount on the due date.

“The defendant proceeded to draw down on the loan facility. Notwithstanding that May 31, 2017 has come and gone, the defendant has failed to fully and punctually pay the monthly instalments when they fell due and payable.

“A first mortgage bond was registered over stand number 2588 Salisbury Township held under deed of transfer No. 4086/01 as security for the debt hence the property becomes executable,” the court heard.

According to court papers, by March 31, 2017, HMMAS was owing a total of $1 037 283, 37 to the bank.

“The aforesaid balance of $1 037 283, 37 is accruing interest at the plaintiff’s current rate of 28 percent per annum calculated from the 31st of May 2017 to date of payment in full. Despite written demand, the defendant has neglected, failed and/or refused to pay,” the court heard.

HMMAS is yet to respond to the application. – Daily News