KTDC seeks to boost capital base with sale of property

Cash raised from the sale of Hilton and InterContinental hotels and Mountain Lodge is expected to help Kenya Tourism Development Corporation’s (KTDC) reach across the country by financing the building of more hotels in selected towns.

The corporation’s CEO, Marianne Jordan, said the parastatal which finances tourist establishments wants to boost its presence in all the 47 counties after expanding the capital base.

“The sale of the shares will enable us advance more loans to private or individual investors who want to help us increase bed capacity,” she said.

Sale of the hotels has been hampered by a delay in naming members to the board of the Privatisation Commission. KTDC needs the cash to finance investors with the value of pending loan applications standing at Sh1.6 billion.

The parastatal owns 40 per cent of Hilton Hotel, 33.8 per cent in InterContinental and 39.1 per cent in Mountain Lodge.

“We have many investors who have approached us for financial assistance. The number is likely to swell as the industry expands into the virgin territories and so the sale of shares comes at the right time,” she added.

Mrs Jordan was speaking in Kisumu on Tuesday evening when she led a team of corporation’s managers in an assessment tour of the region. She said the budgetary allocation to the body was too little to spur growth in the hotel industry.

“With the Sh120 million we were given this financial year you can do very little,” she said.

Michael Koros who is the chief credit officer said the loan given to their customers was to set up hotels and attract reasonable rates.

“Unlike other financial institutions that charge exorbitant rates, our principal loan amount attracts a 9 per cent interest rate cumulatively.”

She said 50 per cent of this year’s financial allocation went to Western Kenya. Most of the money was loaned to entrepreneurs from Nyanza that the corporation said has a serious shortage of beds to accommodate tourists.

In Western and Nyanza provinces, KTDC has hotels in Vihiga, Kakamega and Mount Elgon.

It also own Sun Set Hotel in Kisumu that it is seeking to refurbish at a cost of Sh670 million.

Ms Jordan said there were manybusiness opportunities within Kisumu County and the Lake Victoria region.

“Look at Lake Victoria and the beaches, they are not well utilised. It has very few recreational facilities,” she said.