The government’s plan to offload 33.8 percent of its shares in the struggling Inter-Continental hotel hit a snag after a club of wealthy individuals led by Baringo senator, Gideon Moi, rejected the offer.
The government, which had already sold more than five million of its shares to the billionaires in an earlier deal had hoped to start clearing its debts totaling to shs 717 million owed to Stanbic bank, and which saw it declared technically insolvent.
The rich boys club which is amalgamated in a unit calling itself the Sovereign Group disclosed that it had little interest in purchasing the government stake amid the slump in the travel sector and the exit of the anchor partner — the Intercontinental Hotels Corporation Group.
“There is little value for Sovereign to run the hotel. The land where the hotel sits is more important compared to the hotel,” said an inside source.
The Privatisation Commission was expected to start talks with Sovereign Group to buy the stake that the government holds in the hotel.
But the commission, which is in charge of sale of government firms, says it is yet to receive offers from local or foreign buyers willing to acquire the stake in the hotel, which closed in August at the height of the Covid-19 crisis.
“The commission has not received any expression of interest by either local or foreign investors to buy the hotel,” Joseph Koskey, the chief executive officer at the commission said.
“The existing shareholders will get first priority to exercise their pre-emptive rights as provided for in the Articles of Association.”
The implication of this is that the shares being offloaded cannot be offered in the open market until existing shareholders have been given a chance to invest.
Sovereign Group is the largest individual local investor in the hotel.