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Economy

Moi firm in line to buy InterContinental stake

InterContinental Hotel. FILE PHOTO | NMG
InterContinental Hotel. FILE PHOTO | NMG 

The Privatisation Commission has set the stage for an investment company associated with former President Daniel arap Moi to acquire a 33.8 per cent government stake in InterContinental Hotel Nairobi.

The commission has restarted the sale of government stakes in three luxury hotels including Hilton and Mountain Lodge.

The sale will happen through pre-emptive rights to existing shareholders, meaning existing owners of the hotels will be given the first right to buy the stakes.

This will give Sovereign Group, a fund associated with the Moi family and allies, an edge in the purchase of the 33.83 per cent government stake in InterContinental Hotel Nairobi.

Sovereign Group had 19.3 per cent stake at InterContinental Hotel Nairobi, according to a 2015 report from the commission.

Joshua Kulei, who served as private secretary to Mr Moi, Rodger Kacou and Ahmed Jibril have a combined stake of less than one per cent.

Other shareholders of InterContinental Nairobi were the Intercontinental Hotels Corporation Group (33.8 per cent) and the Development Bank of Kenya with a 12.99 per cent stake.

The Sovereign Group in 2015 informed the competition watchdog of plans to acquire the 33.8 per cent stake held by Intercontinental Hotels Corporation Group in a deal that would have upped its stake to 53.13 per cent.

The Business Daily was unable to confirm whether the deal went through.

The InterContinental Group Plc has been managing the 389-room hotel under a 99-year lease since April 1967.

The Privatisation Commission is seeking consultants to carry out due diligence on Hilton, Intercontinental and Mountain Lodge and six other smaller units and prepare them for sale.

The consultants will be expected to establish the financial health of the hotels and prepare contracts including share transfer agreements.

The sales were first announced in 2011 as part of a plan to help improve the State’s finances and to transfer the running of businesses to the country’s private sector.

The government has a 40.57 per cent shareholding in International Hotels Kenya, which owns the Hilton Hotel. It has a 39.11 per cent stake in Mountain Lodge, which operates under the TPS Serena brand.

The sale of the hotels comes as revenue from tourism jumped 20 per cent last year as the sector continued to recover from a series of attacks on the country a few years ago that had scared away foreign visitors.

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