Muhammed Hamid, 47 left his elder brother’s business as a teenager having gained some experience, confidence, and capital, to start his own business in the early 1990s.
10 years later, he was bidding to build the second-largest hotel by room number in Kampala, which is, arguably, the most magnificent in the capital.
Unfortunately, eight years after it was opened with pomp and glamour, the owner, AYA Investments Uganda Ltd is being liquidated, while Pearl of Africa has just quietly rebranded to Win 5 Hotel and Spa.
In February this year, the liquidation process of the company commenced, and the court-appointed Robert Mugabe, the Director of Insolvency and Receivership at the Uganda Registration Services Bureau, the official receiver, and subsequently, the provisional liquidator.
He is now in the process of meeting with the creditors of the company. A receiver is charged with collecting or receiving revenues from the company’s activities and manages it to clear outstanding financial obligations of the company that is winding up, while a liquidator manages the winding up of the company including selling off the assets to settle the outstanding debts.
These appointments are made after either the company itself or its creditor proves before the court that it is no longer in a position to pay its financial obligations including suppliers, service providers, and government taxes. It is not clear how many companies and individuals have claims on AYA, but one of the longest-running claims is by meat processing company, Fresh Cuts, which says that in 2017 AYA was supplied with assorted meat products worth 44.9 million Shillings which it failed to pay for.
Through Haguma Law Chambers and Advocates, Fresh Cuts secured commitments by AYA to pay but it didn’t fulfill the pledge. On September 12, 2018, Mengo Chief Magistrate Sarah Mbonye directed Aya Investments to clear the 44.9 million Shilling debt plus a 25 percent per annum interest from the year of default to the year of completion of payment, with allowable tax deductions of 10M Shillings.
After failing to enforce this directive against the hotel owner, Fresh Cuts asked the court in 2021 to declare Aya Investments bankrupt following the expiry of the time agreed to clear the date as per the Insolvency Act. In 2018, KCCA threatened to close the hotel for failure to pay local hotel tax that had accumulated to almost 34 million Shillings. The hotel was requesting concessions like paying in installments, which KCCA rejected.
At the same time, the electricity bill was rising and by 2021, the distribution company, UMEME was demanding 800 million Shillings and resorted to power disconnections to force the company to pay.
Last year, Sanlam General Insurance sued Aya Investments fir breach of insurance contracts.
Court ordered the company to pay a total of about 175 million Shillings to Sanlam.
The expected high demand for hotel rooms ahead of the Commonwealth Heads of Government Meeting (CHOGM) in Kampala in 2007 saw the government offer incentives to private investors to cover the gap. The urge made the government give AYA the 14 acres of land that formerly housed Uganda Broadcasting Corporation and other Ministry of Information facilities at Nakasero Hill in the central business district in 2005.
Experts say, with or without cash at hand, it was too ambitious a move to expect to put up a five-star, 296-room 23-story hotel within one year. Hamid expected that the 150 million-dollar investment was possible. CHOGM came and went, and it was not until another eight years later that the hotel was completed and commissioned.
Failure to get the required finances in time as well as management issues were some of the causes of the delays. Hamid admitted to encountering several hurdles that included the withdrawal of Hilton Hotels from the partnership, which affected finances. In 2021, the Industrial Development Corporation of South Africa Ltd attempted to seize the hotel to recover a debt of 118 million dollars (about 400 billion shillings), but the court barred it.
The money is part of the financing contract signed between AYA and the South African entity to finance the construction of the hotel in 2007. AYA says the corporation made it hard for them because it would delay the availability of the money, which delayed the project completion. Hamid also cited disputes with Uganda Revenue Authority on what taxes to pay but also admitted that it was going to be tough completing the construction in time, especially due to Uganda’s landlocked nature.
In 2017, AYA signed a management deal with a Belgium-based hotel company, Carlson Rezidor Hotel Group (now Radisson Hospitality) in January 2017. However, this was short-lived as Radisson withdrew six months later. It was replaced in September of the same year by a South African hotel brand, Sovereign Hotels on a short-term basis to oversee the opening the following month.
American group, Wyndham Hotels, and Resorts, then was hired by Hamid in 2018 to run the hotel, but this was also short-lived. It is currently trading as WIN 5 Hotel & Spa since February this year. The branding has since changed from Pearl of Africa to Win 5, amidst reports that the Libyan foreign investment firm, LAICO has taken the majority holding of the hotel.
The liquidator, Robert Mugabe will tell the AYA Investments U Ltd creditors whether they can still have a claim on the hotel, or just the company without the hotel which is no longer Pearl of Africa but Win 5.
Hamid was born in Wau, Sudan in 1976. In 1987, he traveled to Uganda to visit his elder brother, Mohammed El Hamid, who traded in commodities under Pan Afric Impex. The younger Hamid stayed and joined his brother’s business until he moved on in the early 1990s to start his own business, Pan Afric Commodities.
Apart from AYA Investments U Ltd which owns Pearl of Africa Hotel (or Win 5 Hotel & Spa) Hamid, through his AYA Group, is associated with several other investments, and in 2015, made it to Forbes’ list as the second richest African man under 40. Aya Bakery Limited, Aya Biscuits Limited, and Aya Foundation Limited, a charity helping children in need of expensive health care.
Others are Aya Mills Limited, Fifi Transport Limited which owns a fleet of cargo trucks, Pan Afric Commodities Limited which trades in produce, and Aya Mining Limited. He also owns Aya Mohammed Trade Plc in Dubai, United Arab Emirates, and Aya Property Developers Inc in New York, USA.