Kampala, (UG):- President Yoweri Museveni has temporarily stopped the sale of Pearl of Africa Hotel (formerly Aya) over Shs647b owed to a South African lender, Industrial Development Corporation of South Africa.
The President in his letter dated May 1st 2024 addressed to the IDC cited the need to halt the auctioning so that he could hold a meeting with the South African investors.
“I have been approached by Mohammed Hamid of Aya Investment (U) Ltd Group regarding the imminent sale of his hotel due to his indebtedness to Industrial Development Corporation, South Africa. I have been informed that the sale has been sanctioned by the court having decided several cases in your favour,” said Mr Museveni in the letter seen by this publication.
However, given that Pearl of Africa Hotel is a strategic investment that was supported by the government through land allocation and other benefits, Museveni said the government wishes to intervene so that the debt is paid instead of auctioning the hotel.
“I’m, therefore, directing that the auctioneer halts the sale of the hotel pending my meeting with you. By copy of this letter, I am directing my principal private secretary to organise the meeting this month,” the President ordered.
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When contacted by local newspaper Monitor on Thursday, Mr Timothy Kanyerenzi Masembe, the managing partner of MMAKS Advocates, the law firm representing the South African company declined to comment on the matter citing confidentiality on behalf of his client.
“I can’t comment on this matter because of the client-advocate confidentiality. I can only do so with permission but I can confirm that the letter is authentic,” he told the publication.
Information available to this website indicates that the hotel, under its management of AYA Investments Ltd, was in April this year set up for auction, with May 03rd as the date for the activity to take place.
But Museveni’s letter before the auction date came in handy to temporarily halt the process, but it was not yet clear by press time, whether the meeting between the President and the South African company took place.
Armstrong Limited, the appointed bailiffs, was set to auction the 23-floor hotel on behalf of the lender and law firms M/S MMAKS Advocates and ENSafrica. The current Shs647b debt against Aya Investment ballooned from about Shs316b that was borrowed over the years.
Background of the loan
According to a high court notice issued by deputy registrar Catherine Agwero, businessman Mohammed Hamid popularly known as Aya is accused of defaulting on a loan he acquired from a South African firm; Industrial Development Corporation (IDC) sixteen years ago.
“The application for execution of the judgment creditor in execution…. Is hereby granted and an order of attachment and sale of the following properties at Nakasero Hill Kampala, LRV 3556 Folio 8 plots 7A1-9A1 and 10 Lugard Road, and plots M32, M183, and 2E Nakasero Hill Road Kampala including all the developments is allowed,” Ms Agwero read the ruling last Friday.
Through his company Aya Investments, the loan accumulated over the years to now Shs 611 billion owed to the South African Moneylender, which the auctioneers hope to recoup. The loan emanated from a financing agreement that AYA and the South African organization signed in order to finance the hotel’s construction in 2007.
In court, AYA claimed that the lender had put them in a difficult situation by delaying the money’s availability, which in turn delayed the project’s completion.
Hamid also mentioned disagreements with the Uganda Revenue Authority on the taxes to be paid, but he also acknowledged that it would be difficult to finish the work on schedule, particularly given Uganda’s landlocked status.
About Pearl of Africa Hotel
Pearl of Africa Hotel, located on Kampala’s verdant Nakasero Hill at a height of 1240 meters above sea level is one of the five-star hotels in the country offering the best views of Kampala City from every angle.
The 32,000 square meter hotel has 23 stories, 296 rooms, 37 suites, 2 restaurants, 3 bars, 9 meeting rooms, executive lounges on the 15th floor, and a business centre with all the services of a five-star hotel.
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