The Karisimbi Hotel, a high-end Kiyovu suburb-based facility, is facing the risk of liquidation after failing to pay almost Rwf2 billion owed to creditors.
Karisimbi Splendid Ltd, which owns the property, is understood to have failed to settle a Rwanda Development Bank loan amounting to Rwf1.5 billion inclusive of accrued interests.
There is also Rwf50 million owed to Banque Populaire, unspecified amounts of unpaid workers’ pension money to Rwanda Social Security Board in addition to tax arrears owed to RRA and Nyarugenge District.
According to the liquidator, in November 2017 the Nyarugenge Commercial Court granted BRD the green light to auction the property, which it held as collateral for the offered credit, but could not go ahead after the owner filed for bankruptcy.
Olivier Milimo Mukwende, the liquidator told Rwanda Today they had set November 13 as the date for auction and issued a notice in the media calling all interested buyers.
“For the time being, properties concerned by the auction include the hotel itself, the plot and all the assets on it. There are other properties that the owner gave the bank as collateral but we need to first see if money from the hotel can be enough to settle all debts owed to creditors,” said Mr Mukwende.
The auction of the 24-bed Karisimbi Hotel comes even as a number of properties in the hospitality industry faced liquidation over the past three years owing to failure to pay off debts or disagreements between management and shareholders.
Formerly a restaurant, Karisimbi is a mid-sized hotel that found itself unable to repay bank loans largely due to low clientele, which is linked to stiff competition and oversupply of tier two and three facilities.