Tuesday, November 16, 2010
The Privatisation and Public Enterprises Supervising Agency (PPESA) sent an undisclosed bank a letter of support on behalf of the royal family, to whom Wabi Shebelle Hotel was returned, to use the hotel as collateral to secure financing to pay the 25 million Br required for the transfer of the hotel.
The PPESA decided to return the hotel, which was established in 1968 and nationalised during the Derg regime, back to the children of Haileselassie in 2008. It asked the royal family to pay back the 25 million Br which the government had invested while it was under its supervision, before handing it over.
The royal family was not able to obtain the money to secure the 108-room hotel and approached banks for a loan, using the hotel as collateral, a source close to the royal family told Fortune.
However, since the hotel is still under the supervision of the PPESA, the family needed a letter from the agency, which it dated October 2010, allowing them to obtain credit using the hotel as collateral.
With close to 180 employees, the 11-storey hotel is one of six under the Wabi Shebelle Hotels Enterprise. It uses 90 out of the 108 rooms as bedrooms while the remaining ones are offices.
Three weeks ago, shares of Sodere Resort Hotel, located 117km south of the capital and one of the hotels under the enterprise, were transferred to DEK Oromia Business Investment Plc through a joint venture (JV).
DEK, a JV between Denku Doyassa, owner of Rift Valley University College; Kemer Yousuf, a popular Oromifa singer; and Elias Ebissaa, bought 55.7pc of the shares for 80.4 million Br.
To transfer the title deed to the royal family, the Ministry of Trade (MoT) required a clearance paper from both the agency and the Ethiopian Revenues and Customs Authority (ERCA).
“The family is finalising the loan process and will be able to pay the agency soon,” the source close to the family told Fortune.
Posted by FRIENDS of ETHIOPIA:: at 3:41 AM