State-owned mobile operator, Netone, is likely to lose $11 million to its former service provider, Firstel Cellular after its liquidator said the defunct telco can only pay one percent of the amount owed.
Firstel Cellular, whose business included procurement, marketing and distribution of electronic gadgets, was placed under provisional liquidation on July 1 with Isaiah Nyakusendwa of Regetta Financial Advisory Services appointed as the liquidator.
The telecommunication company is opting to pay-out its creditors, who are owed a total of $11.8 million, a dividend of 1.14 percent totaling $16 000.
Of Firstel Cellular’s net liabilities, NetOne is owed $11.2 million while employees are owed $500 000.
NetOne and Firstel had a service provider arrangement, under which the later was selling contract lines on behalf of Netone and remitting the money to the mobile operator, minus commission.
But the introduction of the multicurrency system in February 2009 resulted in many of the clients failing to service their bills, and Firstel failed to recover $8.3 million. The courts ruled that Firstel was liable to pay the dues.
Nyakusendwa told creditors in a meeting held at the High Court yesterday that Firstel was insolvent and its assets will be auctioned to recover the creditors’ money.
“If we don’t collect anything at all from the debtors given the current situation in the country, we will have a payout of 1.14 percent which is an amount of $16 196…Disposal of assets is work in progress. Assets will be disposed through a public auction,” said Nyakusendwa.
“The debtor’s book of the company mainly consists of airtime sellers and unlikely to be recovered. What actually happened is NetOne took away business from Firstel and the debts were left with Firstel.”- The Source
(62 VIEWS)
0 Comments