February 19, 2017

Madhvani Group to close on $20 million acquisition of Rwandan hotel

Dami Adepoju

Rwanda’s hotel and tourism sector continues to grow and attract investment interest.  The country hosted the three-day Africa Hotel Investment Forum (AHIF) last October in its capital city, Kigali.  Rwanda has been positioning itself as a top tourist destination in the East & Central African region and has seen significant growth in its hotel sector.  There have been signed deals with international hotel operators such as Marriott, Carlson Rezidor, and Kempinski.  The AHIF event was hosted at the newly-opened Radisson Blu Hotel & Convention Center, Kigali.

The Umubano Hotel has a long history.  It was built by Soprotel in 1979, and was owned in a 60:40 partnership by the Libyan and Rwandan governments, respectively.  The hotel started life as a Le Meridien until 1994.  It was briefly managed by Windsor International, and subsequently by Accor Group under its Novotel brand between 2001 and 2008.  In 2009, the hotel came under Laico management until 2011.  In 2013, the hotel was eventually taken over by the Rwandan government.  The Umubano Hotel was due for reinvestment and renovation, the Rwandan government began seeking an investor to acquire the property.  The potential acquisition of the hotel by Uganda’s Madhvani Group signifies a fresh boost of capital into the property and a long-needed renovation programme.  The group signed a purchase and sale agreement for the hotel in January 2017 that stipulates a 30 day due diligence period, after which the deal is expected to close.

The Umubano Hotel is a three-star property located 5km from the center of Kigali.  It has 100 rooms and suites, and offers four meeting rooms, outdoor swimming pool, a mini-golf course, a tennis court, fitness facilities, a business center and WiFi.  There are also banks and retail outlets on the hotel property.

The Madhvani Group is one of the largest diversified private-sector companies in East Africa and was started in Uganda in 1914.  It is involved in agro industry, insurance, manufacturing, and tourism.  According to the group’s website, current turnover is in excess of US$500 million and its assets are valued at US$1 billion.  The company also owned the InterContinental Hotel Lusaka, which was acquired by Kingdom Hotel Investments in 2006 and then by QG Africa Hotel LP in 2016.  The company owns four lodges in Uganda and three hotel properties in Kenya.  This new acquisition solidifies the group’s position as a regional hotel investor in East and Central Africa.

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