Zimbabwe is considering an out-of-court settlement with German bank KfW Bankengruppe which is owed €40 million borrowed more than 12 years ago to rehabilitate the troubled Zimbabwe Iron and Steel Company (Ziscosteel), APA learns here Thursday

Sources said the KfW Bankengruppe settlement would be announced on October 8 when the case comes up at the North Gauteng High Court in South Africa.

“The Zimbabwean government has decided to go for a settlement with the German bank KFW Gruppe and offered to repay the 40 million Euros,” Commercial Farmers Union (CFU) Vice President Louis Fick said.

A South African farmer dispossessed of his property under President Robert Mugabe’s land reform programme, Fick is leading a campaign to sue the Zimbabwean government over the expropriation of farms.

The North Gauteng High Court in July postponed the auction of several properties in South Africa owned by the Zimbabwean government which had been seized to pay back loans from the German bank as well as compensate a group of South African farmers who lost their farms under the land reform programme.

The postponement came after the Zimbabwean government appealed against the legality of the sale.

Seven properties in South Africa’s Western Cape and Gauteng provinces were seized by KfW Bankengruppe in May over Harare’s failure to settle a multi-million dollar loan.

The government, through Ziscosteel, entered into the loan agreement with the German bank in January 1998.

Repayment of the loan was then meant to be done in 16 instalments starting from May 2000. But after only four payments, the last being in 2002, Ziscosteel stopped paying, leaving the German bank with no other option than seek other means of repayment.