Simba Colt owner seeks to list on Nairobi bourse
Posted Tuesday, June 12 2012 at 18:06
Simba Corporation — the owner of auto dealer Simba Colt Motors — is seeking to list on the Nairobi Securities Exchange (NSE) after diversifying its business to include hotels and a new auto subsidiary.
The company is set to develop a three-star 150-room hotel in Mombasa and another with a similar capacity in Nairobi. It has also struck a deal to manage a four-star 96-room hotel under construction in Kisumu.
The hotels will add to the company’s two properties – a luxury camp in the Maasai Mara and a five-star 200-room hotel being built in Nairobi.
On July 2, it will open Xylon Motors – a division that will sell Mahindra SUV and pick-up brands that it has taken over from Oriel Limited, part of Ecta Group of companies.
The company is also in talks with another low-cost vehicle manufacturer with a view to bring in budget saloon cars that cost about Sh1.2 million. This marks Simba’s first venture in the saloon car market.
“The strategy behind the expansion and diversification is to go public as a strong company,” said Adil Popat, Simba Corp’s chief executive. “We have seen a lot of interest in the group and we intend to do an initial public offer (IPO) once all the five hotels are completed,” he said. The company had suspended its plans to go public in the aftermath of the 2008 post-election violence which dampened investor confidence, including the stock market that witnessed significant devaluations.
The investments in the five properties is estimated to cost the company $60 million (Sh5 billion), part of which is being raised through bank borrowings. Geneva-based Kempinski Hotels SA, a luxury hotel management firm, will manage Simba Corp’s five-star hotel in Nairobi named Villa Rosa Hotel and the Mara camp dubbed Olare Mara.
The two partners have signed a long-term contract that will see Kempinski earn management fees for running the properties. Simba will manage the three others by itself.
The company is betting on Kempinski’s strong brand and hotel management experience to grow its market share in the country’s competitive luxury hotel market.
Hemingways Collection and Rezidor Group of Hotels are some of the investors who are putting up property or have expressed intentions to set shop in Kenya in what would add at least 600 beds.
Simba is also eyeing the booming residential and commercial real estate market though it is yet to identify specific projects.
The takeover of the Mahindra franchise from Oriel Ltd marks its latest dealership coup in the new vehicle market after taking over the luxury BMW franchise from Mashariki in 2008.