South African firm City Lodge Group has sold its hotels in Kenya and Tanzania for around Ksh 2 billion to subsidiaries of the UK-based investment firm Actis.
This is mainly to reduce its debts incurred from the loss-making hotels.
The Kenyan hotels – the 127-room Fairview Hotel in Nairobi, the 171-room City Lodge Hotel at Two Rivers and the 84-room Town Lodge Upper Hill in Nairobi will be sold for an estimated KSh1 billion.
The Tanzania unit, City Lodge Hotel Dar es Salaam at Ksh 7.3 million.
“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 Company said.
It also added that “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 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 in disclosures to Johannesburg Stock Exchange.
In 2012, the group acquired a 50 per cent interest in two hotels in Kenya, before taking full ownership of the Fairview Hotel and Town Lodge, Upper Hill, Nairobi.
From 2017, the group developed its own properties outside of South Africa with the establishment of the City Lodge Hotel at Two Rivers Mall in Nairobi, in early 2018 and the City Lodge Hotel Dar es Salaam, in Tanzania, in late 2018.