The fate of Ghion Hotels Addis Abeba which lies over a lush 12ht compound still remains undecided.
The tender process for the eagerly awaited sale of Ghion Hotel Addis Abeba came to an anti-climactic end when bids were opened on August 8, 2012 and not a single offer had been put forward for the hotel.
This is the first time that the Privatization and Public Enterprises Supervising Agency (PPESA) had decided to put the Addis Abeba Hotel which is one of the 11 hotels administered by the Ghion Hotel enterprise on the auction bloc fully, although a Joint Venture (JV) agreement to partially transfer its management had been tried several times before without much success.
Around 12 local and international companies had bought bid documents by Friday, three days before the bid closing date.
Locally business conglomerate MIDROC Ethiopia, owned by Saudi-tycoon Mohammad Hussein Ali Al-Amoudi, and importing giant GET-AS international had bought the bid documents.
Chinese Construction Company, China Communications Construction, Southern Sun, a South African company which manages several hotel chains including part of the international mid-priced hotel Holiday Inn that is located in South Africa, and Panorama International, an American company which provides consulting services for real estate developers have all bought documents.
Even though one of the companies had told Fortune that it had bought the bid documents just to survey an opportunity with no real intent towards participating, there was speculation that the hotel would attract a lot of offers.
The spacious compound and the fact that investors would get full ownership of the hotel is a big incentive, an expert with 18 years of experience in the Hotel Industry had told Fortune before the bid opening date.
However, when bids were opened at the conference room of PPESA's branch office located on Africa Avenue, none of the manila envelopes piled on top of each other contained an offer for Ghion.
Instead offers were read out for the other enterprises put up on auction including Awash winery.
Finally Berhane Gebremedhin, bid committee chairman and Privatization directorate director announced that all offers had been read out loud.
"No offers had come for Ghion although we were expecting some because a lot of companies had bought the bid document," he later told Fortune.
One foreign company looking to bid on Ghion had found the tender period too short as it was not able to get the necessary financing from foreign banks on time, according to source working closely with the company.
"Next time when the Hotel is retendered we will be ready," the source told Fortune.
"We have received one request to extend the closing date but it was for one of the other enterprises not Ghion." Berhane said.
In addition there is talk that foreign companies did not find the requirement by the Agency that they offer to pay all of the money for a company upfront before acquiring it unless they have prior investments in Ethiopia too savory although no one had filed an official complaint, according to an official from PPESA who wanted to remain anonymous.
At the bid opening, the Enterprise that saw the most offers was Limu Coffee Development and its six farms. It was the only enterprise aside from Construction Works and Coffee Technology Development Enterprise to be put on auction for the first time. The latter did not attract any offers that day.
Under the Coffee Development Enterprise, Limu coffee has farms in Oromia and Southern regional states and grows coffee, maize pineapple and honey.
Horizon Plantation, regular participants in auctions offered by the Agency, gave offers for each of the six farms and the main office of Limu. Each of the offers were above the indicative price. In aggregate, they had given an offer of 1.13 billion Br for all.
A subsidiary of MIDROC which already owns Bebeka Rubber Plantation, which lies across the border between the Southern and Gambella regional states, Horizon had previously offered 35.1 million Br and 228.2 million Br, for Gojeb and Coffee Processing and Warehouse Enterprise respectively. Although the offers are approved, Horizon has yet to pay the down payment for these companies.
Coffee exporters, Mulege PLC also submitted an offer for the head office and Goma farm of Limu Coffee Development, offering 186.1 million Br and 20 million Br, respectively. The offer for Goma two farm beats MIDROC's offer by around 10 million Br.
Coffee exporters SA Bageresh offered 13 million Br for the head office and 165.3 million Br for Goma 2 farm.
As usual Awash Winery got an offer, but one that was way below the indicative price.
Busbury Investment Holdings Limited offered 15 million dollars (273.2 million Br) to be paid upfront for the winery whose indicative price was set at 438.6 million Br.
The only state owned winery which has various brands, including Awash, Axumite, Guder, and Camilla, has been troublesome for the Agency. It had been put on the auction bloc several times and was in the process of being partially transferred twice. All of these however were unsuccessful.
Muller Industry Plc made a 119 million Br offer for Batu Construction, a road construction company formed in 1960 whose indicative price was set for 118.7 million Br. It is the second time this year that the company is being retendered
The villa house of the construction company also fetched a 10 million Br offer from Asku Plc.
The final decision on these offers as well as on the fate of Ghion Hotel, will be made by the board of the enterprise, which meets regularly every Friday.