The Intercontinental Hotel in Nairobi. PHOTO | SALATON NJAU
By MUGAMBI MUTEGI, pmutegi@ke.nationmedia.com
In Summary
- Sovereign Group has acquired a 33.83 per cent stake that belonged to global chain InterContinental Hotels Corporation, marking the UK-based firm’s exit from the Nairobi facility after 48 years.
- The Competition Authority of Kenya has approved the transaction, clearing the way for transformation of the prestigious hotel into a 100 per cent locally-owned company.
- The deal gives former president Daniel arap Moi and his allies 53.13 per cent shareholding in Kenya Hotel Properties Limited, InterContinental Hotel Nairobi’s holding company.
An investment company associated with former
president Daniel arap Moi has bought an additional stake in
InterContinental Hotel Nairobi, gaining majority control of the 5-star
establishment.
The Sovereign Group, a fund associated with the Moi family
and allies, acquired a 33.83 per cent stake that belonged to global
chain InterContinental Hotels Corporation, marking the UK-based firm’s
exit from the Nairobi facility after 48 years.
The ownership changes have been made public in a
Kenya Gazette notice indicating that Sovereign Group is in the process
of acquiring 5,874,391 shares in Kenya Hotel Properties Limited, the
holding company the owns InterContinental Hotel Nairobi, for an
undisclosed amount.
The Competition Authority of Kenya (CAK), through
the gazette notice, has approved the transaction, clearing the way for
transformation of the prestigious hotel into a 100 per cent
locally-owned company.
The Business Daily was not able to confirm
the value of the transaction but given the stake involved and stature
of the premises, it should be in hundreds of millions of shillings.
Solomon Kitungu, the Privatisation Commission’s
chief executive, said the government’s stake in the firm was still
intact and had not been sold.
“The government has not disposed of its stake yet.
That is the InterContinental Hotels Group which moved its shares,” he
said in reference to the gazette notice.
The deal gives the former president and his allies
53.13 per cent shareholding in Kenya Hotel Properties Limited,
InterContinental Hotel Nairobi’s holding company.
The Kenya government, through the Tourism Finance
Corporation (TFC), owns a 33.83 per cent stake in the holding company
that it is still looking to offload. The Development Bank of Kenya with a
12.99 per cent stake is the other significant shareholder in Kenya
Hotel Properties.
Joshua Kulei (Mr Moi’s former private secretary),
Rodger Kacou and Ahmed Jibril own a combined stake of less than one per
cent in the firm.
The InterContinental Hotels Corporation has been
running and managing the 389-room InterContinental Hotel Nairobi under a
99-year lease since April 1967.
Talk of an ownership shift at the hotel began in
August 2011 when the then President Mwai Kibaki’s cabinet gave the green
light for the sale of TFC’s stake with pre-emptive rights to existing
shareholders.
TFC, formerly known as Kenya Tourist Development
Corporation, was offloading the shares in a privatisation exercise meant
to transfer government-owned businesses, including underperforming
sugar mills, to the private sector.
Parliament in January 2013 gave the corporation the
go-ahead to sell its 40.57 per cent shareholding in Hilton Hotel and
the 39.1 per cent it owns in Mountain Lodge Limited. Mountain Lodge in
Mount Kenya National Park is managed by TPS Serena, which owns a 29.91
per cent in the facility.
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