Moi’s purchase of InterCon will be known this month

Part of InterContinental Hotel. A group linked to former president Daniel arap Moi owns a big stake in the facility. File 

By GALGALLO FAYO

The Sovereign Group, an investment fund associated with the family and allies of former president Daniel arap Moi, will this month make its stand on plans to buy the prestigious Nairobi InterContinental Hotel.

The Privatisation Commission said it will ask shareholders of the 389-room hotel to state whether they want to buy the 33.8 per cent stake being offloaded by the government through the Kenya Tourist Development Corporation.

The government gave Intercontinental Hotel’s shareholders, including Intercontinental Hotels Corporation Group, Sovereign Group, and Development Bank priority in buying the shares. This means that the shares cannot be sold in the open market until shareholders have been given a chance to invest, paving the way for Moi and his allies to snap up the stocks.

(Read: Treasury gets nod to sell stake in Hilton, InterCon hotels)

“We will be asking shareholders of Intercontinental Hotel to officially inform us next month (July) of their need to participate in the pre-emptive rights,” said an executive of the Privatisation Commission on Friday.

“We are almost through with due diligence and the next stage is the sale. Top shareholders, including
 Intercontinental Hotels Group and Sovereign Group, have since 2011 expressed need to buy extra shares, but not formally.”

The Intercontinental Hotels Corporation Group, which is listed in both the UK and the US, has a 33.8 per cent stake in the hotel group.

Other shareholders in the holding company are Sovereign Trust (19.3 per cent), Development Bank of Kenya (12.99 per cent), and Joshua Kulei, Rodger Kacou and Ahmed Jibril a combined stake of less than one per cent. The Sovereign Group will, however, have to fight it out with the International Hotels


Corporation, which recently demonstrated appetite for expanding its operations in East Africa’s largest city by establishing the Crowne Hotel brand.

The Intercontinental Group Plc has been running and managing the hotel under a 99-year lease since April 1967. The government has chosen to dispose of shares in the hotel along with the 42-bed Mountain Lodge Hotel and Hilton Hotel in the hope that shareholders will have the leeway to inject more capital into refurbishing the facilities. KTDC has been unable to inject cash for refurbishment


The State owns 40.57 per cent of Hilton Hotel and 39.11 per cent of Mountain Lodge, which operates under the TPS Serena brand.

The Privatisation Commission has not said how much it expects to raise from the sale of the luxury hotels. The sales were first announced in 2011 as part of a plan to help improve the state’s finances and transfer the running of businesses to the country’s private sector.

The government has large shareholdings across a number of companies. It plans to retain stakes in strategic assets such as energy and telecoms.

Tourism is an important source of foreign exchange in the country, earning Sh96 billion last year and is targeting to cross the Sh100 billion mark this year.