FairView Hotel Sale: Nairobi’s Fair View Hotel and City Lodge Two Rivers are set to be sold at Sh. 1 billion. The hotel will be sold to private equity fund Actis for Sh. 1 billion.
City Lodge Hotel Group put up the three Kenyan hotels and Tanzania’s City Lodge Hotel in Dar es Salaam up for sale as part of its plan to quit the East African market.
This exit comes less than seven years after the group ventured into this market. It has also been fueled by streaks of losses that in the year 2020 stood at some Sh. 2 billion per year. Although the Kenyan hotel will be sold at Sh. 1 billion, the Tanzania one will be sold at some Sh. 7.3 million.
“The shares in respect of the Kenya Disposal will be disposed of for an aggregate consideration of ZAR140.9 million which will be settled in cash by Ukarimu and the shares in respect of the Tanzania Disposal will be disposed of for an aggregate consideration of ZAR1 million which will be settled in cash by Faraja,” the firm said. “The losses attributable to the Kenya Assets and the Tanzania Assets including impairments was ZAR371.1 million for the six months ended 31 December 2020.”
The sale update was shared at the Johannesburg Stock Exchange where the hotel is listed.
Fairview Hotel has 127 rooms, while City Lodge Hotel at Two Rivers has 171 and Town Lodge Upper Hill 84. The firm has not however made a direct reference to sluggish business as the reason for selling the hotels which will now leave its operations in South Africa, Botswana, Namibia and Mozambique.
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“The board of directors of City Lodge has previously communicated its desire to dispose of the company’s entire East African hotel portfolio together in order to reduce debt levels within the City Lodge group, increase group liquidity and eliminate ongoing operating losses,” the firm said on the FairView Hotel sale.
