A South African Company has put on sale three multi-billion hotels operating in Kenya including the famous Fairview Hotel.
A report by Business Daily on Thursday, December 10, indicated that the company, City Lodge Hotel Group, put up the three hotels, which also include Town Lodge and City Lodge, for sale in preparation to exit the East African market.
The parent company, in its filing disclosures at the Johannesburg Stock Exchange (JSE), further indicated that a buyer for the hotels had already placed an offer.
“Shareholders are advised that following receipt of an unsolicited non-binding offer for the proposed acquisition of City Lodge’s East African operations, comprising of its hotels situated in Kenya and Tanzania, the company has entered into negotiations which, if successfully concluded, may have a material effect on the price of the Company’s securities,” read a statement from the company.
Business in the hospitality industry had slowed down in the months since the pandemic hit the country in March.
The company conceded to making over Ksh3 billion loss due to the Covid-19 pandemic, the highest in its three-decade run.
The company, which is publicly listed on the JSE, began its operations in Kenya in 2012 by setting up Fairview Hotel.
It initially brought a 51 percent stake before increasing its stake to 100 percent in 2014 in a deal worth Ksh1.88 billion.
It gradually expanded its hotel line by opening City Lodge at Two Rivers Mall before adding a third hotel.
In 2020, City Lodge Two Rivers was given a tax break by KRA worth millions of shillings but the reprieve appears to have done little to alleviate the harsh business environment.
“The 2020 financial year was our most challenging operating year in the group’s 35-year history, mainly due to the lockdown protocols implemented by the South African government, and similar restrictions in the rest of Africa countries in which the group operates,” added the company.
It currently has a combined 320-bed capacity across its hotels in Kenya. Covid-19 pandemic saw its bed occupancy rate shrink from 55% to 38%.
Out of the three hotels, only Fairview had recorded a robust performance.
The company has operations in various other countries including South Africa, Botswana, Namibia and Mozambique.
