16 October 2017

Rwanda: Ubumwe-Hilton Deal Hangs in Balance Over Investors' Row

Photo: New Times
Ubumwe Grande Hotel in Kigali.

The much-publicised takeover of Ubumwe Grand Hotel by global hotel chain, Hilton Group, could go up in smoke even before it takes effect after a key stakeholder in the business came out breathing hot and cold over "not being consulted" in the engagement.

Rahul Chaudhary, the executive director of CG Corp Global based in Nepal, and a major investor in Ubumwe Grand Hotel, said last week he learnt about the takeover of his Kigali property by Hilton Group through an article this newspaper had published.

This, despite being one of the major shareholders of the facility, holding a board position.

Th deal, he said, was done without his consent and largely behind his back.

Hilton Group last week announced that they will operate the facility under DoubleTree brand, joining other global brands in the Rwandan market including Radisson Blu, Park Inn, The Marriott, Serena Hotel and Golden Tulip.

The facility, which has 153 rooms - 134 guest rooms and 19 apartments - opened in September last year.

The franchise is expected to begin operations in the first quarter of 2018.

According to a statement by Hilton Group, the hotel will undergo some changes in order to rebrand.

But Chaudhary is opposed to the deal. Among the other reasons, Chaudhary cites an ongoing arbitration case involving the property.

In an interview with The New Times, last week, Chaudhary explained that all the three shareholders in the property should have been involved in the business development.

"The decisions should have been made by all shareholders, that was not the case in this agreement," he said.

The property is valued at about $40 million, and is owned by three partners: CG Corp Global (owners of Zinc Hotel brand), and the Mukwano Group, who own a combined 80 per cent stake; and Rwandan Robert Bapfakurera, who owns a 20 per cent stake.

In a correspondence with Hilton Group (seen by this paper), Chaudhary made attempts to alert the international franchise that there were ongoing court disputes about the property.

There are two arbitration cases involving the property, The New Times has learnt.

This development could put the takeover of the property by Hilton Group in jeopardy as CG Corp is likely to open a court case.

Chaudhary vowed to exhaust all possible legal avenues to ensure that due process is followed.

CG Corp Global runs a hotel franchise, Zinc Hotels, with presence in about 45 locations across the world.

When investing in the Kigali-based facility currently in dispute, Chaudhary says it was supposed to be an addition to the franchise.

Patrick Fitzgibbon, the senior vice-president for development in charge of Europe, Middle East and Africa at Hilton Group, declined to comment on the issue and instead referred this newspaper to the shareholders.

"I am afraid we cannot comment, talk to the shareholders," he said.

Some lawyers who spoke to The New Times on condition of anonymity said that among the likely courses of action could be seeking a court injunction to block the franchise running the property.

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