The crippled Rwandatel is speeding the sale of assets to pay back the creditors before the end of this year, but the remaining issue is whether the amounts from its assets will be enough to pay all the creditors.
Exclusively speaking to igihe.com, Richard Mugisha, appointed by the Nyarugenge Commercial Court to administer the company, noted: “If we are to maximize the value of the creditors, we need to do it very quickly.
“We are hoping to pay back all the creditors but we can’t guarantee that since it will depend on the sums got out of the liquidation of assets.
“When the company’s assets are successfully sold off, we shall discuss with the different institutions and individuals whom we owe, when and how the payment process will be implemented,” he said.
According to the administrator, Rwandatel’s assets are valued US$50M, yet the creditors’ amount goes up to US$88M and as of now, no investor has confirmed buying the assets.
He added that the company is commissioning the valuation of its assets and then allow investors to bid.
“We don’t want to engage people without knowing how much our assets are worth, but this will be done before the end of this month and then at the beginning of September, we start the process of selling the assets ,” the Administrator pointed out.
Debtors’ point of view
MTN Rwanda, as one of the Rwandatel’s creditors is so suspicious since the interconnection fees of fixed lines is continuously increasing the debt yet they don’t know whether the company will have capacity to pay back.
“According to the report I presented to the Judges, we now demand Rwandatel Rwf1,341,557,553 and we don’t know if the company is in position to pay back,” Paul Mugemangango, the Senior Manager, Legal and Corporate Affairs MTN Rwanda told Igihe.com.
The above amount includes Rwf60M accumulated on fixed interconnection fees during the period of 60 days after the revocation of the company’s mobile license.
Other sources also point out that the Chinese company; Huawei who supplied materials is demanding over US$40M and this company is also suspicious about the clearing of such a huge debt.
Background
Rwanda’s Utilities Regulatory Agency (RURA) withdrew Rwandatel’s GSM Mobile license in April this year and within weeks, the Office of the Registrar General had instituted insolvency proceedings against the company.
The commercial court in Kigali then appointed Richard Mugisha an administrator to take charge of the company and advice Court if the company could be turned around or face possible liquidation.
Rwandatel has confirmed that it will be meeting with its creditors after a local court ordered the company to liquidate its assets to pay debts.
Employees’ side
Following commencement of insolvency proceedings, Rwandatel had laid off 43.2 per cent of its workforce as part of a company-wide restructuring process whose goal was to keep her operating costs low and to operate with an optimum number of employees.
Even the remaining employees are also suspicious about being unemployed. “We are still surviving in the temporary period and we don’t know our way forward,” an employee who never wanted his names to be published told igihe.com
Operating both its GSM Mobile and Fixed licenses, Rwandatel had a total workforce of 317 employees out of which only 180 have been retained to run its remaining voice, internet and data services all of which run on the fixed network.
The telecom company is partially owned by Libyan investment group LAP Green with an 80 per cent stake and the Social Security Fund of Rwanda (SSFR) which has 20 percent.
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