Capital Ethiopia Newspaper

No buyer for Ghion

Al-Amoudi’s Horizon offers 1.1 bln birr for six farms, HQ

One of the nation’s oldest hotels established in connection with the conception of the Organization of African Unity is still looking for a new owner.
Previously Ghion Hotel’s partial privatization bids had surprisingly failed on several occasions when no investor showed interest or did come but never sealed the deal. Now the tender for full acquisition did manage to attract both local and foreign companies. Ghion Hotel was floated for full acquisition for the first time and potential buyers purchased the bid document from the Privatization and Public Enterprises Supervising Agency (PPESA) in late June. Capital sources indicated that over ten companies from North America, England, Asia and Africa had bought the bid document for the hotel. In a very disappointing turn of events though, at the bid opening of the Ghion and five other state enterprises, on Wednesday August 8, no offer was found to have been made for the purchase of the hotel. None of those potential buyers who purchased the bid document showed up to compete. 
The situation has mystified the agency and observers following up the bid process for the hotel acquisition. The hotel’s location and its vast area are highly attractive points and influential business people did come forward in previous biddings to secure the management of the hotel on a joint venture with the Agency; although all deals collapsed. “It was highly anticipated that a bunch of hopeful bidders would be part of this full acquisition bid,” observers said.  
According to officials at the agency, competition was expected to be stiff between interested bidders to finally own the hotel that has been dangled by the privatization agency for the past few years.
The highlight of the bid’s opening day was the offer of Horizon Plantation, one of the agricultural companies of Ethiopian born Saudi business tycoon Sheik Mohammed Hussein Al-Amoudi.
Horizon offered a total of 1.184 billion birr for the ownership of six farms and the head office of Limu Coffee Plantation located in Jimma town.
Goma I, Goma II, Cheleleki, Gumer, Suntu and Soka are the six farms that were offered during the bidding process under Limu Coffee Farm. According to Horizon’s bid document it offered 266.6 million birr as a maximum price for one of the six farms and a minimum price of 70.9 million birr. The company has also offered 60.4 million birr for the ownership of Limu Coffee Plantation head office. Horizon proposed to buy the whole farm with a 35 percent upfront payment and 65 percent of the payment to be paid over five years.
In addition, Al-Amoudi’s farm is the only company that showed interest in purchasing four of the six Limu farms. Goma I and II are the only two farms that attracted other bidders with Horizon. SA Bageresh bid 186.1 million birr for Goma I and the head office and 174.1 million birr for Goma II, while Mulege Plc offered the highest amount of 186.1 million birr to own Goma I and 20 million birr for the farm head office. Both companies proposed to buy the farms and head office with a 35 percent upfront payment and 65 percent of the payment to be paid over five years.
Recently, companies including Horizon have agreed with PPESA to own Ethiopian Marble Enterprise, Gojeb farm, Upper Awash Agro Industry, Abobo farm with a total price of over 1.3 billion birr.
Awash Winery had a bid offering lower than 270 million birr (USD 15 million) from Basbery Investment Holdings Limited with a 100 percent payment. But the American company’s offer is under the floor price set by PPESA. On several occasion the agency tabled the winery on the bid bloc but did not get satisfactory offers or bidders who wanted to own the industry with PPESA’s floor price, which is 438.6 million birr.
The state beverage enterprise has two wineries in Addis Ababa and one on the outskirts of the capital city Sebeta and produces different types of wine for local and foreign markets. Awash used the vine produced on the state owned farms for its wine production. Muller Industry PLC and Ascu Batu PLC are the only companies who participated in the bid to own Batu Construction SC and Batu Construction SC villa houses respectively.
The companies have offered 119 million birr for the construction enterprise and 10.1 million birr for the Villa, while the floor price is 118.7 million birr and 6.29 million birr correspondingly. Construction Works and Coffee Technology Development and Engineering Enterprise was also on the bid table but did not get any bidders like Ghion. The floor price for it was 63.7 million birr.