Tuesday, 30 April 2013

Rwandatel assets now up for grabs


One of Rwandatels masts in Kigali. The New Times/ Timothy Kisambira.
Telecom FIRM Rwandatel, which is under liquidation after the majority shareholder Lap Green of Libya failed to keep it afloat, is finally up for grabs.

The struggling telecom company has sold its masts to Airtel and remained with assets valued at less than $15 million that await sale “as soon as possible,” the caretaker has revealed.

Richard Mugisha, a lawyer in charge of administering Rwandatel and selling off its assets after a court decision placed the firm under liquidation in 2011, said Bharti Group acquired all the company’s masts at $15.5m last year.

Remaining assets

The lawyer said Rwandatel’s remaining assets include the liquidated company’s data and video infrastructure, a landline telephone service that is provided across the country, and portions of land, among other things.

But he said the remaining assets are of a lesser value compared to the

masts that Airtel acquired to boost its GSM network in the country.

“The biggest assets were the masts and they are gone,” Mugisha said during a recent interview with The New Times.

The revelation of a lesser value for the remaining assets implies that they could be acquired at less than $15 million (about Rwf9.5 billion).

How Rwandatel fell flat

The liquidation of Rwandatel was ordered after a Libyan government-affiliated company, LAP Green, which had acquired 80 per cent shares, had failed to salvage it from enormous debts and improve its services as it had been wished by the Rwandan government.

LAP Green had acquired the company in late 2007 after agreeing to pay $100 million to the Rwandan government and improve Rwandatel’s services in the country.

The company’s data and video infrastructure have been deemed attractive.

Promises that never came

Though Mugisha is not worried that the remaining assets will soon be sold to the competitive bidders, he also doesn’t talk about the appeal of the remaining assets without highlighting the potential of the “strong” data and video infrastructure owned by the company under liquidation.

“The future of telecommunication industry is in data, not voice,” he said. “As soon as we get someone with the financial muscle to invest in the business, it’s a good opportunity.”

At the acquisition of Rwandatel, representatives of LAP Green had promised to transform the loss-making and highly-indebted firm, which clearly remained with very few subscribers, into a competitive business.

They had also said they would use the company’s potential to position Rwanda as an ICT hub in the Great Lakes Region, where LAP Green already had a 69 per cent stake in Ugandan Telecommunications Limited by the time it decided to acquire Rwandatel.

Mugisha said Rwandatel’s copper and fibre optic cables are still valuable for an investor who would want to develop services to provide data and video, which he said are likely to lead over the provision of voice through GSM in the future.


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