The Government of Rwanda has pulled out of the deal to sale stake in Gisovu tea factory to Olyana Holding, citing breach of contract, Business Times has learnt.
The move comes barely months government had signed a sale purchase agreement with the American liability firm, allowing it to acquire 60 percent shares in the tea factory and plantation.
Anthony Butera, Director General of Ocir-Thé told Business Times in an interview yesterday that George Rubagumya, who was representing Olyana violated the contract.
“The law stipulated that none of the shareholders would sale shares before operating for 10 years or finishes the implementation of the business plan,” Butera explained.
According to Butera, the President of Olyana holdings, Rubagumya, decided to sale 75 percent shares of Gisovu tea factory to an Indian Company called McLeod Russel before it had acquired it.
The deal would mean that the Indian company would have 45 percent and Rubagumya would remain as a minority shareholder with only 15 percent.
Olyana had not paid money to fully acquire the stakes in Gisovu factory.
The factory produces around 1.7m Kgs of tea annually and for a long period it has been offering the best teas from Rwanda on the Mumbasa tea auction market.
Olyana’s acquisition of the controlling stake in Gisovu was on a long term basis with the objective of developing its plantation, manufacturing and marketing activities.