Kenya’s Government has apparently decided to divest, finally, in 2011 of shareholdings presently held by the Kenya Tourist Development Corporation in hotels, resorts and lodges around the country.
In many cases will the present company law make it necessary to offer shares currently owned by government through KTDC, to other existing shareholders who have the first right of refusal, although in some cases it might so happen that such shareholders waive these rights, allowing government for instance to either divest the entire block to one investor or else float shares on the Nairobi Stock Exchange.
Interesting enough, in the city of Nairobi the government holds a major share each in the Intercontinental Hotel and the Hilton Hotel via the local holding companies, and these two will undoubtedly attract intense interest amongst the public and institutional investors. Both hotels have been making substantial profits in the past and are ‘blue chip’ investments, but again, fellow shareholders will have to first make it known to government, when the divestiture offer formally comes along, if they wish to exercise their pre-emptive rights or else waive them.
Other notable ‘gems’ are such safari properties as The Ark, where Fairmont Hotels Kenya is the majority shareholder and management company, the Mountain Lodge, where industry leader Serena Hotels holds shares and is management company, but also Kenya Safari Lodges, a company which comprises the Mombasa Beach Hotel and the Voi Safari Lodge in Tsavo East and Ngulia Safari Lodge in Tsavo West. This company in particular is expected to attract local bidding, as the two lodges are favorites with safari travelers on beach holidays along the coast and would undoubtedly add ‘oomph’ to the portfolio of new owners.
Other properties upcountry are such hotels like the Sunset Hotel in Kisumu, overlooking the Lake Victoria, the Golf Hotel in Kakamega – of late a Fly540 scheduled destination – and the Kabarnet Hotel, but also the Mt. Elgon Lodge near Kitale on the Kenyan side of the mountain.
The respective shareholdings vary according to the information received from Nairobi from under 6 percent to over 98 percent of the issued shares, and the same source also pointed out that the preparations for the divestiture are nearly complete, giving hope that the formal process of notification to fellow shareholders will soon go underway.