The highly anticipated bid for the complete acquisition of Ghion Hotel is expected to attract many investors.
Although the hotel was on table several times for privatization and investors have approached the Ethiopian Privatization and Public Enterprises Supervising Agency (PPESA), state enterprises supervisory body, to control the biggest state owned hotel, no deal has gone fruitful so far.
According to Wendafrash Assefa, Public Relation head of PPESA, the bid for Ghion will open on August 9, 2012. He said that the bid for full ownership of the hotel has attracted several investors. But he expects more investors to appear until the final day of the bid open.
The current bid for the hotel is different than the prior PPESA privatization process. Previously, most of the deals to manage the hotel were of partial acquisition to be shared with the government. “But this one is for full ownership which is one of the major reasons for the interest of investors to involve on the bid struggle,” a representative of one of the interested companies to join the bid told Capital.
In early February the agency had invited investors to develop, expand or upgrade Ghion hotel. PPESA invited individuals and/or consortiums to submit their Expression of Interest (EOI) including their price offer and design for expansion before April 2, 2012. However, an agency official said that no offer was received by the deadline, as a result PPESA had decided to privatize it completely; awarding whoever wins the bid one hundred percent ownership.
The agency’s shift to a full acquisition option resulted in the revision of the hotel’s original estimated floor price from April.
Ghion hotel, located in the heart of Addis Ababa, bordering the National Palace, has grabbed the attention of many high profile investors and companies over the years, following the government’s repeated invitation for interested parties to come on board on a JV basis. However, all of the deals, which included local and foreign speculators, have so far failed.
The Indian business giant Tata, Aklile Berhan Mekonnen (Prince), an Ethiopian born Italian based investor, and the Saudi billionaire Al Walid Bintalal were some of the investors that had shown interest to manage Ghion with the agency. Hilton Addis is yet another entity that had discussed management option of the Ghion before the government decided to partially privatize the hotel about a decade ago.
Filoha Hotel Enterprise and Ghion are the only two hotels administered under the agency. In the last three years PPESA has transferred Ethiopia hotels and Ras hotels enterprises, which have a chain of hotels in several tourist areas, to private investors.
Similarly the agency has also transferred three hotels located in the northern historical towns that were under the Ghion Hotel Enterprise to private investors.
Currently the government does not seem to have a plan to privatize Filoha hotel, which is popular for its naturally hot spring water.
The Ghion Hotels Enterprise was established in 1951 and previously operated a chain of eleven hotels, all in the northern part of Ethiopia.