Rwandex sale hits dead end

KIGALI - The sale of the defunct coffee export company, Rwandex, has for the third time hit a dead end. This comes after potential buyers present at the auction yesterday failed to air even a single bid due to the sellers’ standing price. The liquidation follows the company’s failure to clear its Rwf3 billion debt it owes several banks. Rwandex Gikondo which is valued at Rwf 1 billion and its sister company Rwandex Gisenyi at Rwf 700 million. After the seller announced the standing prices, potential buyers present at the auction who included representatives from various companies like Coffee Business Centre (CBC), Caico and Rwanda Estates just looked on unyieldingly. When The New Times asked some of the bidders why they did not make a move during the liquidation process, they said that the selling price is high considering the biting global financial crisis. “Considering the current financial constraints we are in, Rwf 1bn is high especially given the current state Rwandex is in. They should consider revising their price if they are to sell it because it will again require other 4 billions to stabilize it and set it going,” pointed out a participant who preferred not to be named. Some of the participants also argued that banks are also not in position to lend them money due to the current state of the industry. The issue of the general financial crisis that has significantly affected them (banks) was also mentioned again. The chairman of the Rwandex liquidation committee, Ambassador Emmanuel Kayitana Imanzi, sighted a conspiracy for the failure to close the sale. “The buyers have formed a conspiracy within themselves to fail our selling price, requiring us to agree to their desired prices. But we are keen on following the lawful procedure in our sale and we believe we shall downplay their conspiracy.” He, however, said the committee is going to sit and review the entire process and terms involved in the last three attempts. “We shall review the previous attempts to make the necessary changes for a fair and successful sale. We shall use all possible avenues even if it means changing tactics to a one-on-one sale or other methods, but we have to sell the company at a deserved price,” he underscored. Bank de Kigali (BK) is demanding Rwf 2.169bn while Banque Populaire du Rwanda and COGEBAQUE are owed a combined Rwf 1.1bn by Rwandex. The company’s export volumes dropped by 50 percent in 2003 and a further 15 percent in 2004 when the coffee sector was liberalized. Before folding in, Rwandex was exporting between 5,000 to 7,000 tonnes of ordinary coffee fetching between US 9 million to USD 10 million annually. Rwandex is currently valued at USD 2.7m (about Rwf1.4 billion). The Government’s 51 percent shareholding was valued at over Rwf 576m. The shutting down of Rwandex comes at a time when the coffee sector is promising. Nationwide earnings for this year are projected to rise to USD 60 million from 28,000 tonnes. Almost 30 percent of this export volume will go into the lucrative US market. Government, through its Privatization Secretariat, announced the company’s closure in February last year. Another date for the sale has been set for July 11, 2009. End