The luxurious Intercontinental Hotel, at the heart of Nairobi is likely to be auctioned following massive accumulated debt.
The five-star hotel, well-known as a haven in the city, is claimed to be at risk of being auctioned by creditors.
A letter dated February 7, 2019 signed by the Chief Executive of Tourism Finance Corporation (TFC), Mr Jonah Orumoi, to his Privatization Commission counterpart Joseph Kosgey, revealed the financial struggles of the 389-bed hotel.
Orumoi drafted the letter to Kosgey, whose Privatization Commission is mandated to sell government assets.
Mr Orumoi wrote to Kosgey stating, “We wish to bring to your attention the following facts.
The company (KHP) is facing financial challenges to the extent that it cannot meet its obligations as they fall due,” he asserted.
He further noted that KHP is technically insolvent since it cannot service its debts, owed to Stanbic Bank, that stood at Ksh717 million by the end of 2018.
“KHP is not able to service its long term facilities as they fall due which have attracted huge accrued interest and penalties,” Mr Orumoi affirmed.
According to the CEO, the financials difficulties facing the hotel situated at the heart of Nairobi, have caused some creditors to threaten to have KHP blacklisted at the Credit Reference Bureau, if it fails to service the loan within the next 90 days.
He also lamented that some creditors have gone ahead to threaten to send in auctioneers.
Read: Kenya Commercial Bank Announces Closure Of Lokichoggio Branch
In the letter, seen by one of the local dailies, it highlights that in 2015, TFC lent KHP a loan facility of Ksh124.7 million, which has not been paid and has since accrued interests to Ksh207.7 million as at December 31, 2018.
To the surprise of many, it is also noted that the hotel, has no insurance cover for incidents such as fire breakouts.
Orumoi also divulged that since 2009, the hotel has not made any profits and made a loss of Ksh113.7 million in 2019.
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