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After the failure of the Privatization and Public Enterprises Supervising Agency (PPESA) to fully privatize Ghion Hotel Enterprise, the biggest state hotel, in early August, Aklile Berhan Mekonnen (Prince), who had agreed with the Agency in 2010 to manage the hotel jointly, convey his interest to initiate the deal again.
The Prince is the only investor who went through all formalities up until the final stage of the privatization bid two years ago, however he did not make his down payment on time, the last step.
PPESA, the public enterprises regulatory body, concluded the USD 512 million deal for joint venture management, but the deal was terminated after six months due to a delay by the investor in coming up with the initial USD 210 million capital.
Following the Prince’s disappearance PPESA had canceled the offer and put up the hotel for sale in the past budget year with full acquisition. This was the first time the agency decided to privatize the hotel fully. Ghion has been offered for auction on different occasions, but so far none of the deals made have been fruitful.
On the latest bid that opened in the past month no interested buyer appeared, while over ten local and international companies purchased the bid document.
A few weeks ago Aklile Berhan told Capital that he has still an interest in managing the hotel. He confirmed that he would approach the agency for the second time to revive the initial deal.
“There was a delay for the down payment due to problems, but I asked the agency to give me additional time,” Aklile, an Ethiopian born Italian based investor, explained to Capital.
He said that he has sufficient investment capacity to make Ghion one of the biggest hotels in the capital.
Wondafrash Assefa, public relations head of PPESA, told Capital that he did not have any information on whether Aklile has approached the agency to rekindle the old deal or not.
Wondafrash said that the business plan that Aklile delivered was highly related with the agency’s requirements, but he did not deliver on time. “The hotel will up be up for sale for the second time in the current budget year and the Prince can participate in the bid,” he said.
On August 8, the bid’s opening day 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. PPESA asked for USD 150 million floor price for the sale of the hotel in the past bid.
The Ghion Hotels Enterprise, one of the nation’s oldest hotels established in connection with the conception of the Organization of African Unity, which was established in 1951 and used to operate a chain of eleven hotels. The rest of the hotels, which are all located in historical areas of northern Ethiopia, have already been transferred to private investors.