The Privatisation Authority has rolled out the sale of the government’s 33.83 percent shareholding in Kenya Hotel Properties Limited(KHPL), which owns the building which was previously managed by the Intercontinental Hotel Group in Nairobi.
The State on Thursday invited investors to bid for its stake in KHPL, cementing a series of planned divestitures from the hospitality industry.
“The Government of Kenya, through the Privatisation Authority invites expressions of interest (EOIs) from prospective investors for the acquisition of 33.83 percent of government shareholding in KPHL,” the Privatisation Authority said in a call for bids.
Intercontinental Hotel shut its doors at the building adjacent to Parliament in August 2020 and sent its staff packing after a desperate battle for survival that was maimed by the Covid-19 scourge.
The hotel chain’s woes had begun way before Covid. For instance, in 2019 it had been declared ‘‘technically insolvent’’ by the Tourism Finance Corporation (TFC), which holds the government’s stake in the property.
In a letter to the Privatisation Commission (PC) in February 2019, TFC lamented that the business was on its deathbed. The hotel was, for instance, unable to repay a debt of more than Sh700 million owed to Stanbic Bank. It is not clear if the debt has been settled.
‘‘KHP is not able to service its long-term facilities as they fall due. [This has] attracted huge interest and penalties,” TFC said in a letter to the Privatisation agency.
Revealingly, the hotel also did not have basic items such as insurance for its property—exposing it to loss in the event of incidents such as fires.
The planned sale of the hotel building has, however, dragged on for many years despite its sorry financial state. Attempts to sell the government’s shareholding in 2015, for example, ran into headwinds after the would-be buyers, Sovereign Group, quoted a price lower than the market rate.
In 2021, KHPL further complicated the government’s seemingly half-hearted desire to sell the hotel when the entity sought to lease out or convert the building into a mixed-use property. The conversion would have seen the InterCon become an office block with shops, restaurants, and other businesses. But years later, its rooms remain empty as the facility rusts away, with debt and maintenance costs soaring.
