Actis concludes payment for City Lodge hotels after acquisisionMonday July 25 2022
Private equity firm Actis has paid Sh1 billion to complete the purchase of Nairobi’s Fairview Hotel, Town Lodge, and City Lodge Two Rivers from a South African hospitality group.
City Lodge Hotels Limited says it has received the funds from Actis which also acquired a hotel in Tanzania as part of the transaction.
“Shareholders are … advised that the gross proceeds from the disposals as set out in the terms announcement have been received and applied to repay the debt facilities coming due for repayment within the next 14 months together with the outstanding overdraft,” City Lodge said in a trading update.
The multinational announced mid-last year it had put up the three Kenyan hotels and Tanzania’s City Lodge Hotel in Dar es Salaam for sale in plans to exit East Africa after barely seven years of operation.
The company says the East Africa units were lossmaking to the tune of Sh2 billion as of the end of 2020.
The firm says that occupancy levels have been below expectations at Two Rivers while bookings in the Tanzanian unit have been sluggish, leaving only Fairview with a robust performance.
It said the sale was prompted by the need to reduce debt levels and eliminate operating losses. Fairview Hotel has 127 rooms; City Lodge Hotel at Two Rivers has 171 rooms and Town Lodge Upper Hill has 84 rooms.
The deal involves a joint bid between Actis and a private company registered in the British Virgin Islands called Jamison Valley Holdings.
Filings at the Comesa Competition Authority show the hotels have been bought by Actis and Jamison Valley Holdings indirectly through Ukarimu real estate funds. The two buyers have formed a special purpose vehicle- SPV listed in Mauritius called Msafiri Limited which will own Ukarimu.
The filings do not indicate what stake each company will have in the SPV or the ownership details of Jamison listed in the offshore tax haven of the British Virgin Islands.
In the Headlines
Tigoni allure: Real estate haven for tycoons fleeing NairobiBy EDNA MWENDA
Why banks don't want CBK to issue digital currenciesBy PATRICK ALUSHULA
State drops plan to privatise sugar companiesBy COLLINS OMULO
What it's like to try Apple's new Vision Pro headsetBy REUTERS