Prime
Museveni stops auction of Pearl of Africa Hotel
The Pearl of Africa Hotel on Nakasero Hill in Kampala. Photo/file
President Museveni has temporarily stopped the sale of Pearl of Africa Hotel (formerly Aya) which owes Shs647b to a South African lender, Industrial Development Corporation of South Africa.
In a May 1 letter to the Industrial Development Corporation of South Africa, Mr Museveni said there is a need to halt the auctioning to allow him to hold a meeting with the South Africans.
“I have been approached by Mohammed of Aya Investment (U) Ltd Group regarding the imminent sale of his hotel due to his indebtedness to Industrial Development Corporation, South Africa. I have been informed that the sale has been sanctioned by the court having decided several cases in your favour,” Mr Museveni states in his letter.
He added: “However, given that Pearl of Africa Hotel is a strategic investment that was supported by the government through land allocation and other benefits, the government wishes to intervene so that the debt is paid instead of auctioning the hotel. I’m, therefore, directing that the auctioneer halts the sale of the hotel pending my meeting with you. By copy of this letter, I am directing my principal private secretary to organise the meeting this month.”
By press time last evening, it was not clear whether the meeting between the President and the South African company took place.
In an interview yesterday, Mr Timothy Kanyerenzi Masembe, the managing partner of MMAKS Advocates, the law firm representing the South African company, said: “I can’t comment on this matter because of the client-advocate confidentiality. I can only do so with permission but I can confirm that the letter is authentic.”
In April, Aya Investments was set up for auction with the action date having been set for May 3.
Armstrong Limited, the appointed bailiffs, was set to auction the 23-floor hotel on behalf of the lender and law firms M/S MMAKS Advocates and ENSafrica.
The current Shs647b debt against Aya Investment ballooned from about Shs316b that was borrowed over the years.
Background
From August 13, 2007, to April 21, 2017, Aya Investments (U) Limited and the Industrial Development Corporation of South Africa engaged in multiple Financial Credit Agreements aimed at funding the development of the Pearl of Africa Hotel on Nakasero Hill in Kampala.
The aggregate principal amount disbursed across 20 instances under six Financial Credit Agreements totaled $81,765,318 (Shs305.6b).
A rift developed between Aya Investments and the South African lender due to the former’s failure to adhere to the terms of the Financial Credit Agreements.
There have since been several legal battles that ended with the hotel being put under auction.
