The Privatisation and Public Enterprises Supervising Agency (PPESA) will lower the indicative price of Ghion Hotel Addis Abeba, when it retenders it for full private ownership in the coming three weeks, after taking the recommendation of outside consultants, SAB management and Development Consultancy Fortune learnt.Officials from the Agency will only confirm that the indicative price is lower than before, but have declined to state the exact amount. However a source who used to work closely on the matter had stated that it may be between 100 million and 130 million dollars.
The indicative price for the hotel had been set at 150 million dollars,when it was put on the auction bloc for full private ownership for the first time last July.
Although around 12 local and international companies,including hotel owners and those involved in the import export business had bought the bid document, no one had submitted tenders for the hotel in time for the bid closing date.
“The time was too short to secure the appropriate financing from foreign banks and submit a complete bid,” an advisor to a foreign company interested in buying the Hotel had told Fortune then.
The expert who also has long years of experience in the Ethiopian hotel business also added that the indicative price is fair if enough time is given to submit bids, since the hotel has ample open space.
Addis Abeba’s Ghion, one of the last two remaining of the 11 hotel chains under the Ghion Hotels Enterprise, was built in 1951 and sprawls over 12ha of land.
Prior to the July tender it had only been offered for a joint venture deal several times by the Agency.
Most recently, PPESA had made an agreement with a German company Dnknesh Dnknesh Vermogenveeravltung (GMBH), represented by Aklileberehan Mekonen, who claims to be a descendant of the Ethiopian royal family, to give up 80pc ownership for 8.3 billionBr.However Aklileberhan did not appear at the signing contract in November 2011, having failed to make the 3.5 billion Br down-payments.
In addition to the large space, the fact that bidders get a chance to fully own and manage the hotel will attract investors at the indicative price given, according to the expert.
Despite his opinions three officials at the Agency have indicated to Fortune that they think no bids had come in past because the indicative price set for the Hotel was too high.
The indicative price set was not based on current research but had come from previous documents when the Hotel was being offered for partial ownership in a joint venture agreement, Wondafrash Assefa, Public Relations head at the Agency told Fortune.
Interested in getting a current asset and business valuation assessment on Ghion and five other public enterprises it plans to put on the auction bloc, PPESA had floated an open international tender in September 26, 2012, using funds from the World bank.
SAB management and development Consultancy PLC, a local firm had been picked from around four that had submitted proposals, according to the source who was working closely on the matter.
The consultancy finally signed an agreement with PPESA four months ago for an undisclosed sum. Along with Ghion it is also doing valuations for Adola Gold Development Enterprise, Minerals Development Enterprise and Artistic Printing Press.
To carry out the task, SAB had subcontracted the job to Zimbabwean and British property valuators, according to a source who wants to remain anonymous.
Ghion, along with Adola, Artistic printing and Minerals development will now be put in the auction bloc in the coming two weeks, after the board makes a final decision.
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