South Africa’s would-be broadcasting and VoD streaming service Kwese Play has been placed into administration. Its overall debts are reported to have been around $130 million at one stage.
A letter from the company’s owners to liquidators Ernst & Young (E&Y) admitted the broadcaster was in financial distress and that there was material doubt that it could pay further liabilities. Kwese Play used Roku-based technology for its service.
Kwese Free TV, itself 20% owned by the Econet Group (which owns the Liquid Telecom business), has been licensed by the South Africa regulator to launch a terrestrial free-to-air digital service in the country. Econet Media CEO Joseph Hundah says that Kwese Free TV is not connected or affected by the financial developments, and that it was only the DTH portion of the business that was affected.
Econet Media is a subsidiary of the well-regarded Econet Wireless. Kwese TV is based in Johannesburg.
Creditors had received some funds over the past months.
The letter to E&Y explained: “Around November 2018, management entered into settlement arrangements with most of the company’s creditors,” the letter said. “All creditors with balances of up to $100,000 were paid in full. In the most part, creditors of the company with balances of more than $100,000 were paid 15% of their balances with agreement that (1) a second instalment will be made by the company around May 2019 (25%), (2) a second instalment will be made by the company around August 2019 (25%) and (3) a final instalment will be made by the company around December 2019 (35%).”
The company was now unable to meet the May 2019 instalment, hence the move into administration.
Kwese was largely financed by its Zimbabwean owners.
“Regrettably, with the current macroeconomic conditions in Zimbabwe, which is the company’s primary source of funding, the company has been seriously affected by the currency regime.”