Saudi billionaire prince sells iconic Norfolk in Sh2.8bn deal
Saudi billionaire Prince Al-Waleed bin Talal has sold his stake in the troubled Fairmont The Norfolk and Fairmont Mara Safari Club to a Nepalese tycoon for Sh2.8 billion. The mega deal was closed ahead of the global spread of Covid-19.
The two hotels came to the limelight last week after the management announced it was firing all the employees, citing the effects of the Coronavirus pandemic.
Thursday, however, it issued a notice in which it announced the withdrawal of the earlier memo. The withdraw came after the Office of the Attorney-General questioned the legality of the firing.
Now, it has emerged that Prince Al-Waleed, through his investment vehicle, Kingdom Holding, sold his stake to the Chaudhary Group (CG). The prince has been reorganising his portfolio months after being detained in Saudi Arabia’s sweeping crackdown on corruption.
A transaction advisor who participated in the Fairmont deal and who spoke to the Business Daily on condition of anonymity said the Norfolk and Mara Safari Club cost the Nepalese tycoon Sh2.8 billion.
“Prince Alwaleed is no longer in the game after surrendering the ownership of remaining hotel business in Kenya and his investment group is focusing somewhere else,” said the advisor.
“The transaction has been closed and now the Nepalese owners are embarking on a full 100 percent renovation that will go for a whole one year.”
Chaudhary Group, which is associated with Binod Chaudhary, a billionaire Nepalese lawmaker, has already listed the two hotels among its string of high-end hospitality investments spread in Asia and the Middle East.
It says the deal will give it an additional 170 guest rooms and suites, 51 luxury tents and about 10 food and beverage outlets.
The acquisition of the iconic Nairobi hotel and the Mara tented facility will be the second deal in the region for the Kathmandu-based multinational which also owns Le Relax Hotel in the Indian Ocean island nation of Seychelles.
Chaudhary Group also has investments in banking, education, energy, telecommunication and pharmaceuticals with operations in five continents. The Group Chairman and President, Binod, is estimated to be worth $1.4 billion (Sh148.5 billion), according to Nepalese media reports.
Kingdom Hotel Investments shelled out Sh6 billion in 2005 to acquire and upgrade the Lonrho properties – the last remnants of British aristocrat Tiny Rowland’s vast empire.
They included the Norfolk Hotel in Nairobi, the Mount Kenya Safari Club in Nanyuki, the Aberdare Country Club, the Ark and the Mara Safari Club.
The acquisition was hailed as one of the largest in East Africa at the time. But Prince Alweed has taken a strategic decision to divest from hotels, selling Four Seasons Damascus in Syria and Four Seasons Beirut in Lebanon.
The sales come two years after the prince, who is a grandson of the founder of Saudi Arabia, became one the high-ranking Saudi officials arrested in what authorities there said was an anti-corruption crackdown.
Now in his 60s, the flamboyant prince is a serial investor in top global luxury hotel chains. He has in the past 30 years built up a fortune worth $20.4 billion (about Sh2.1 trillion), according to Bloomberg.
Prince Al-Waleed also has major stakes in News Corp, Citigroup and Twitter. He co-owned the Four Seasons hotel chain along with American billionaire Bill Gates and is the owner of London’s landmark luxury hotel, The Savoy.
His other hotel investments include the George V in Paris and the Plaza in New York.
Kingdom Holdings had earlier ceded control of the 5-star Fairmont Mount Kenya Safari Club to elusive businessman, Humphrey Kariuki, who is currently fighting a Sh41 billion tax evasion suit.
CG Hospitality has embarked on major renovations and upgrades of the Norfolk hotel and Maasai Mara property, which was partly damaged by recent floods after the Mara River broke its banks.
The takeover of the Kenyan hotels has come at a time when the hospitality sector has been ravaged by the effects of restrictions to slow down the spread of Coronavirus.
The Nepalese group is also fighting an employee revolt after its workers declined an offer to remain on unpaid leave during the coronavirus period and demanded to be retained on 50 percent pay.
Last week, the hotel said it had fired all the workers and closed the two hotels indefinitely. Thursday, however, it rescinded the move after the Attorney-General’s office questioned the move.
The ban on all international flights imposed in mid-March to curb the spread of the coronavirus have delivered a big hit to the country’s tourism industry, with some hotels at the Coast reporting occupancy rates of well below two percent in April.
The dusk-to-dawn curfew and a ban on movement in and out of five counties worst hit by the coronavirus outbreak, including Mombasa and Nairobi, worsened the hoteliers business.
Most five-star hotels including Nairobi’s Tribe Hotel, Ole Sereni and DusitD2 have closed or suspended operation due to effects of coronavirus.
Kenya has reported 2,340 Covid-19 positive cases and 78 deaths.
This story was first published in the Business Daily.