The embattled debt-ridden real estate company, DN International, is in talks with an American company to buy 50 percent shares, equivalent to $2m (approx Rwf1.2 billion) of the firm, The New Times has learnt. The company, whose troubles exacerbated when Fina Bank moved to auction the houses the former had sold to individual buyers, hopes to strike a deal with Thousand Hills Venture Fund as it struggles to raise funds to clear the bank’s debt.
The embattled debt-ridden real estate company, DN International, is in talks with an American company to buy 50 percent shares, equivalent to $2m (approx Rwf1.2 billion) of the firm, The New Times has learnt.
The company, whose troubles exacerbated when Fina Bank moved to auction the houses the former had sold to individual buyers, hopes to strike a deal with Thousand Hills Venture Fund as it struggles to raise funds to clear the bank’s debt.
The development follows public threats by the CEO of Rwanda Development Board, John Gara, to seize properties belonging to the DN if the company failed to pay its outstanding debts with Fina Bank.
RDB is playing an arbitration role between the bank and the troubled realtor.
The Managing Director of DN, Joseph Kapukha, said that RDB has not officially communicated to them about the seizure, adding that his company was working round the clock to solve the problem as soon as possible.
"We have agreed with the parties that are involved in this issue that DN International should have cleared its outstanding debts (with Fina Bank) by March 12, 2012,” he said.
"We are currently in talks with Thousand Hills Venture Fund, an American company, to come up with a partnership in new capital and acquire 50 percent of the company shares. We intend to seal the deal sometime in January and that will give us the financial ability to clear the loan ahead of the set deadline” said Capuchin.
DN accumulated a debts close to Rwf1 billion to construct the Hill View Estates, but only repaid less than Rwf600 million, with the outstanding debt totaling to about Rwf450 million.
The money that the developer allegedly defaulted on was paid by occupants of 19 units in the estate, who paid full amount for the houses, but the developer never remitted the money to the bank.
Subsequently, the bank, which had retained the titles of the houses as collateral, decided to auction the houses to recover its money.
The auction was supposed to take place last month but RDB intervened to ensure that the issue was settled amicably without anyone being victimised in the process.
"One of the options we are considering is seizing DN International’s property, auction them and pay back the bank; that move would be in the interest of protecting the 19 people who had paid for the houses,” said Gara.
Part of DN’s property that could be seized includes the Greenpark Villas housing Estate, located in Rusororo Sector, Gasabo District.
However, in an interview with The New Times, the Spokesman of the Prosecution, Alain Mukuralinda, said that RDB can only seize DN’s property through a legal process.
"If RDB files a case in court, and convince the judge that it is doing it to protect those who innocently bought the houses, then there is a possibility that the judge might authorize the move,” said Mukuralinda.
Conflicting accounts
Meanwhile, the circumstances under which the CEO of DN International, Nathan Lloyd, left the country remain mysterious. Lloyd was arrested over the same issue, in August, but later released.
Police and prosecution are giving conflicting accounts, with neither of them explaining how he regained his freedom, let alone sneaking out of the country. It was also not clear whether his release was conditional or not.
Police Spokesman, Theos Badege, said that police arrested Lloyd and submitted his dossier to the prosecution as is always the case with criminal proceedings.
"Our responsibility ended at the time when we handed his dossier to the prosecution; they should tell you how he was released,” said Badege.
However, Prosecution’s spokesperson Mukuralinda said: "Llyod was in police custody when his case was first brought to our attention (by the police).”
"Actually Lloyd’s dossier is currently in courts of law but there are two options to consider; to either arrest him and arraign him in court or try him in absentia, the decision will be taken by the court.”
In a recent interview, DN International’s Joseph Kapukha confirmed his boss had left the country, and that the last time they had talked he was in Kenya "trying to raise the funds to clear the bank debt”. Lloyd is also believed to have moved his family out of the country as their Kacyiru home is deserted.