Monday, July 25, 2011

Rwanda - Rwandatel to be sold off to cover the costs of paying creditors following its liquidation

[the new times] Rwandatel is set to be sold by the end of this year in a move aimed at raising money to pay its creditors.

The country is also in dire need of a third mobile phone operator in order to meet its ambitious six million mobile subscribers by the end of next year.

The decision to sale Rwandatel follows an order by the commercial court in Nyarungenge to liquidate Rwandatel, which once enjoyed a duopoly in Rwanda's telecom industry alongside MTN Rwanda

Court said liquidation of Rwandatel, which is the first in the country's history, was the best way to safeguard the interests of the company's creditors and other stakeholders.

"The liquidation strategy to be adopted is to sell the business assets to another player offering telecommunication services. The move will ensure maximisation of the value of assets and enable continuation of service delivery without interruption," Rwandatel's Administrator, Richard Mugisha, said.

He is hopeful the current assets are worth something and creditors' hopes entirely depend on being able to create value from these assets.

"We are not pessimistic that the assets cannot produce value," Mugisha said.Court requested all Rwandatel creditors to submit their claims against the company by August 18, 2011.

In an effort to create a framework to resolve the challenges with the company's creditors, the court requested all creditors to convene a special meeting.

The Administrator said they intend to sell the entire business, and that the objective is to get the best price from the assets.

Rwanda Utilities Regulatory Agency (RURA)'s Director General, Regis Gatarayiha, said the decision was taken according to the report provided, which showed that the company was financially distressed.

"It's not regulator that is supposed to determine whether any company is insolvent, it was done by the mandated institutes," Gatarayiha said.

RURA revoked Rwandatel's GSM licence on April 8, this year following two notices from the regulator asking the company to fulfil its investment plan, coverage, roll out plan and quality of service.

Rwandatel to Be Sold Off

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