Pearl of Africa Hotel Set for Sale Over Unpaid Debts

Kampala, Uganda | THE BLACK EXAMINER | Bailiffs from the court have initiated proceedings to sell the Aya Group’s Pearl of Africa Hotel, which is situated on the picturesque Nakasero Hill in Kampala and is owned by the 47-year-old businessman, Muhammed Hamid.

This exquisite property stands as a 5-star hotel, perched at an elevation of 1,240 meters above sea level, affording it the distinction of being one of the highest points in the city, providing a breathtaking 360-degree panorama of Kampala City.

Spanning an impressive 32,000 square meters, the hotel comprises 23 floors, encompassing 296 rooms, 37 suites, 2 restaurants, 3 bars, 9 meeting rooms, executive lounges on the 15th floor, and a well-appointed business center replete with top-notch 5-star amenities.

In a public announcement published in Ugandan newspapers on Monday, September 25, Armstrong Limited, acting as government Court Bailiffs, auctioneers, and debt collectors, under the instructions of M/S MMAKS Advocates and ENSafrica Advocates, who are representing the Industrial Development Corporation of South Africa Ltd, have declared that the hotel will be subject to a public auction on October 26, 2023, unless the hotel settles the entire outstanding decretal sum, inclusive of interest, and the related fees and costs before the gavel falls at the auction.

The auctioneers are pursuing the recovery of a debt totaling Shs 611 billion, which Aya Investments owes to a South African lender. This sum forms a part of the financing agreement initially entered into between AYA and the South African entity to fund the construction of the hotel in 2007.

AYA had argued in court that the lender’s actions had made it challenging for them as they caused delays in the availability of funds, subsequently hampering the project’s timely completion. Hamid also acknowledged difficulties in completing the construction on schedule, citing Uganda’s landlocked geographical position and disputes with the Uganda Revenue Authority regarding tax matters.

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In a recent court decision, the Court of Appeal ruled that the struggling businessman could not appeal the initial decision, asserting that the courts of law could not intervene in lawful arbitration processes. This meant that Aya Investment Limited was barred from pursuing appeals to higher courts in the case where the commercial court had endorsed the payment of the Shs 611 billion arbitral award to IDC of South Africa Limited.

The Bruce Collins QC Tribunal of South Africa had ordered Aya to remit this amount to IDC as an arbitral award on September 11, 2021. The award consisted of a Shs 305 billion unpaid principal sum that the South African firm had advanced to the Ugandan businessman a decade earlier, according to documented records.

Court records indicated that IDC had sought the Commercial Court’s permission to register the award as a High Court decree in Uganda, a move that was granted by Justice Stephen Mubiru, further embroiling the Ugandan businessman in the dispute with the South African company.

Despite Hamid’s efforts to employ local courts in his attempts to thwart the South African lender, his hotel business continued to falter. In 2017, AYA entered into a management agreement with the Belgium-based hotel company, Carlson Rezidor Hotel Group (now Radisson Hospitality) in January 2017. However, this partnership was short-lived, as Radisson withdrew its involvement just six months later. In September of the same year, it was succeeded by a South African hotel brand, Sovereign Hotels, on a temporary basis to oversee the hotel’s opening the following month.

In 2018, Hamid brought in the American group, Wyndham Hotels and Resorts, to manage the hotel, but this arrangement, too, was short-lived. Since February of the current year, the hotel has been operating under the name WIN 5 Hotel & Spa. The branding has subsequently shifted from Pearl of Africa to Win 5, amidst reports that the Libyan foreign investment firm, LAICO, has taken the majority stake in the hotel.

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