NAIROBI, Kenya Aug 18 – The Cabinet on Thursday approved the sale of its stake in two international hotels as it seeks divest its interest in the hospitality industry.
A Cabinet meeting chaired by President Mwai Kibaki on Thursday gave consent to the sale of the Kenya Tourist Development Corporation’s shares in the Intercontinental Hotel and the Hilton Hotel.
They also approved offloading of its shareholding in Mountain Lodge Hotel.
The shares in the hotels are held on behalf of the government through the Kenya Tourist Development Corporation, a development fund that finances construction of hospitality facilities on concessionary terms.
The government has a 40.7 percent stake in the Hilton, 33.8 percent in Intercontinental Hotel and 39.11 percent in Mountain Lodge.
Proceeds from the sale are to be ploughed back into KTDC’s development kitty to fund other projects in the tourism sector.
The privatisation process of hotels has been an ongoing affair, with the government on several occasions failing to agree to sell its shares. It had earmarked 13 hotels from which it intended to divest its interests.
In March, Tourism Minister Najib Balala indicated that the ministry had come up with a new mechanism for the Cabinet to consider over the privatisation process. The proposal sought to exit investment in hotels, which had matured and where the government was not the majority shareholder.
This would give the government time to decide on an exit strategy from the remaining hotels.
Other hotels the government has an interest in include Golf Hotel in Western, Mount Elgon Lodge, Sunset in Kisumu and The Ark Lodge in Nyeri.
Mr Balala said for the remaining hotels, the government would get a strategic investor to make them competitive.
“Our plan is to consolidate all our shares to one big partner, get a strategic partner to manage the hotels so that they are up to international standards,” Mr Balala said on March 7.