One of the largest Nairobi Hotels is at risk of being blacklisted with CRB!
Hotel Intercontinental, according to a letter dated February, 7th, 2019, is unable to repay its debts and has not made a profit in the last 10 years!
The iconic located five-star city hotel is deep in debt to a tune of more than Sh700 million as at the end of 2018.
As a result, the 389- bed capacity hotel under the sun stares at auctioning in the face.
Exposed rot
The letter from Mr Jonah Orumoi, the chief executive of Tourism Finance Corporation (TFC), to his Privatisation Commission counterpart Joseph Kosgey, exposes the sorry state of affairs at the strategically located hotel.
Intercontinental Hotels Corporation Ltd and TFC each own 33.83 per cent of Kenya Hotel Properties, the holding company that owns Hotel Intercontinental.
“We wish to bring to your attention the following facts,” Mr Orumoi wrote to Mr Kosgey, whose Privatisation Commission is mandated to sell government assets. “The company (KHP) is facing financial challenges to the extent that it cannot meet its obligations as they fall due.”
Technically Insolvent
Mr Orumoi noted that KHP is technically insolvent since it cannot service its debts that stood at Sh717 million at the close of 2018.
“KHP is technically insolvent since its current liabilities (Sh717 million) exceeds current income (Sh206 million) by Sh511 million,” Mr Orumoi said.
“KHP is not able to service its long term facilities as they fall due which have attracted huge accrued interest and penalties,” Mr Orumoi said.
Blacklisted at CRB
Due to the financial constraints, creditors, like Stanbic Bank (Sh717 million), have threatened to blacklist KHP at the Credit Reference Bureau, which will slam the breaks on more credit, should the hotel fail to service the loan in three months.
The hotel that has not made a profit in 10 years made a Sh113.7 million loss last year.