Karisimbi Hotel was sold to Sajea Investment Co. Ltd under auction following five years of liquidation.
The hotel is located in the affluent Kiyovu neighbourhood in Nyarugenge District
The hotel’s insolvency troubles originated from a bank credit that they were unable to pay.
The buyer of the 3-star hotel with 20 rooms acquired it at slightly more than Rwf515 million during the auction that took place in December 2022, insolvency lawyer Olivier Mukwende told The New Times.
In September 2016, the Commercial Court appointed Mukwende as the administrator in hope that Karisimbi hotel would turn around and pay back its debt.
A year later, it emerged that the property could not turn around its position and pay its debts while under the new administration. This was in consideration of business trends, available capital and extent of debt.
In November 2017, the commercial court appointed Mukwende to oversee its liquidation to settle the creditors.
The New Times understands that creditors include Development Bank of Rwanda (BRD), Rwanda Revenue Authority, Rwanda Social Security Board, Banque Populaire du Rwanda (BPR) and Nyarugenge District.
The creditors sought to recover close to Rwf2 billion from the asset.
Mukwende said that since the step of at least recovering 75 percent of debt in assets was not possible, they resolved to use an auction procedure as provided by the mortgage law.
"The law is clear. According to Article 212 of Insolvency Law in Rwanda, the money will be used in a preferential order of dispense, reward of the property administrator during the liquidation period, and the rest will be given to the secured creditor,” he explained.
Since the money is not enough to cover all the expenses and pay back the whole debt, the remaining creditors will, unfortunately, not get any percentage.
Mukwende also said that the handover ceremony will take place once an updated evaluation of the property is finalized.
Karisimbi hotel has been operational as a hotel since 2012 and was previously a restaurant since 2001 and was previously among the most popular hotels.
However, in recent years, multiple new hotels have entered the scene across the city including the Kiyovu neighbourhood and increased competition.