President Museveni has asked the Industrial Development Corporation of South Africa Ltd, the company pushing for the auctioning of Pearl of Africa Hotel over debt, to stay the process as the government considers a bailout.
The President, in a letter dated May 1, 2024, to Mmarks Advocates, the Ugandan law firm that represents the South African funder, said Mohammed of Aya Investments (LI) Ltd Group has approached him regarding the imminent sale of the hotel.
“I have been approached by Mohammed of Aya Investments (LI) Ltd Group regarding the imminent sale of his hotel due to his indebtedness to Industrial Development Corporation, South Africa,” the President wrote.
“I have been informed that the sale has been sanctioned by courts having decided several cases in your favour However, given that Pearl of Africa hotel is a strategic innvestment that was supported by Government through land allocation and other benefits, Government wishes to intervene so that the debt is paid instead of auctioning the hotel.
1, therefore, wish to hold a meeting with you to discuss other ways of recovering your loan instead of selling the hotel,” he added.
Therefore, the President said he was 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 organize the meeting this month,” he added.
Last year, the court directed the auctioning of the five-star hotel over Aya Investments’ failure to pay the South African entity more than Shs600b inclusive of interest and the principal sum.
The High Court issued an attachment order and sale of properties belonging to businessman Mohammed Hamid after defaulting on his loan he acquired from the Industrial Development Corporation of South Africa.
Aya Investments received a loan facility to construct the said hotel in 2007.
The hotel spans 32,000 square meters and comprises 23 floors, 296 rooms, 37 suites, 2 restaurants, 3 bars, 9 meeting rooms, 15-floor executive lounges and a business center with all top 5 star amenities.
Likewise, the hotel situated at an altitude of 1240 meters above sea level, makes it one of the highest points with a 360-degree view of Kampala City.
The embattled company has in the past years been trapped in several legal battles with creditors and many other service providers, all arising from reluctance to pay its debts.
In 2018, Fresh Cuts dragged Aya Investments to court in order to recover over shs44m after it declined to pay for assorted meat products that were supplied to it on credit.
Court went on to order Aya Investments to pay Shs44.9m to its creditor, an order it never honored.
This saw Fresh Cuts further asked the court to declare them insolvent for failure to pay its debts.
Many more entities have had a face-off with Aya Investments for defaulting on payment on its debts which include, Capital City Authority demanding Shs34m meant for local hotel tax arrears.
In 2022, Aya Investments Uganda Limited was ordered to pay Shs175m to Sanlam Insurance Company for breach of insurance contracts.
