Intercontinental Hotel Which Registered Zero Profits in 10yrs Risks Auction
The famous Intercontinental Hotel, located at the heart of Nairobi is tittering on the brink of collapse due to financial woes.
The graceful whitewashed building has for many years been a landmark overlooking Uhuru Park as well as the Jomo Kenyatta Mausoleum.
The 389-room 5-star hotel was run and managed by the InterContinental Hotels Corporation under a 99-year lease that dated back to April 1967.
According to reports, the hotel is currently facing serious debt issues to the tune of Ksh700 million as of December 2018.
The chief executive of Tourism Finance Corporation (TFC), Jonah Orumoi spilled the beans regarding the hotel's predicament in a letter to the head of the Privatisation Commission, Joseph Kosgey.
A report by the Nation noted that the hotel had allegedly registered zero profit in the last 10 years, with Ksh113.7 million being floated as their operating loss in the last financial year.
“We wish to bring to your attention the following facts. The company is facing financial challenges to the extent that it cannot meet its obligations as they fall due.” read an excerpt of Orumoi’s letter.
According to the latest reports, the famed hotel is now technically insolvent as its current liabilities (Ksh717 million) exceed current income (Ksh206 million) by Ksh511 million.
The Stanbic bank alongside other creditors are demanding well over Ksh700 from the hotel, while the Tourism Finance Corporation (TFC) has threatened to send in auctioneers in a bid to recover their money.
Currently, Stanbic bank is looking into having the hotel blacklisted at the Credit Reference Bureau (CRB).
The situation is alleged to be so dire that the establishment isn't in a position to cover their insurance premiums, nor service the entire second floor which has been closed off to the public as it’s in need of major repairs.
Interestingly, former U.S. President Franklin D. Roosevelt and Juan Trippe (President of Pan Am) were the two individuals who came up with the concept of having a chain of luxury hotels across the globe.
They had envisioned a surge in global travel leading them to start the International Hotel Corporation, to serve the booming market as well as accommodate Pan Am crews and passengers.
The iconic hotel is popularly associated with visiting heads of state; having hosted among others the former president of Nigeria – Goodluck Jonathan, President Yoweri Museveni of Uganda, US Vice President Joe Biden and other dignitaries such as former US Secretary of State Hillary Clinton.
Joshua Kulei (Moi's former private secretary), Rodger Kacou and Ahmed Jibril own a combined stake of less than one per cent in the hotel.
In addition, the Sovereign Group, a fund associated with the Moi family and allies, acquired a 33.83 per cent stake that belonged to global chain InterContinental Hotels Corporation, marking the UK-based firm’s exit from the Nairobi facility after 48 years.
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