By Lehlohonolo Lehana.
Caption: Ayanda Kanana (main picture) and Dr Linda Magingxa, Image Supplied.
The Land Bank, which has missed another deadline to conclude an agreement with lenders, announced on Tuesday that its CEO Ayanda Kanana had resigned.
The embattled bank announced the news in a brief statement on Monday night, without giving reasons for his premature departure.
Kanana joined the bank at a very difficult time and has been instrumental in leading the entity’s turnaround efforts.
The Land and Agricultural Development Bank of South Africa has been struggling to find a way forward since missing a loan repayment in April 2020 that triggered a cross-default in notes issued under a 50 billion-rand ($3.2 billion) bond program.
“We hope to get it out of default by the end of the financial year,” Chairwoman Thabi Nkosi said in an interview on Tuesday. “We are already in advanced talks with lenders,” with 28% of liabilities having been settled, she said.
The Land Bank has been seen as a potential harbinger for how debt at other struggling state companies will be handled. Arms maker Denel SOC Ltd. last week said it was seeking government help after missed bond payments put it at risk of default. Eskom Holdings SOC Ltd, the national power utility, has 392 billion rand of debt and is dependent on state bailouts.
The bank, a wholly-owned government development finance institution, provides 29 percent of South Africa’s agricultural debt.
It has since received a R3 billion capital injection from the government and will get a further R7 billion over the next 3 years.
Nkosi’s comments come after the Bank announced that Kanana had resigned, along with Dr Litha Magingxa, who oversaw agricultural economics and was acting head of strategy.
“The new board was appointed late last year with a clear mandate. We needed to clean house and very specifically deal with the challenges, we found an organization where internal controls were in dismal state, she said.” “The CEO joined the bank at a time when it was already difficult. That can exacerbate stress and we sympathize with that but we will continue to address these issues.”
Kanana declined to comment. He will leave the bank at the end of April and a replacement is being sought, with interim measures to be announced, Nkosi said.