InterContinental Hotel risks being auctioned over high debts the luxurious facility has incurred.
Reports by the Daily Nation indicated that the five-star Hotel has a Ksh700 million debt which it is unable to pay. Creditors are said to have threatened to auction the hotel since it can not meet its obligations.
A letter sent to Joseph Kosgey, the Privatization Commission Chief Executive, detailed how deep in debt the Hotel was and the sad state of the facility.
Jonah Orumoi, the chief executive of Tourism Finance Corporation (TFC) wrote: “The company (KHP) is facing financial challenges to the extent that it cannot meet its obligations as they fall due.”
Intercontinental Hotels Corporation Ltd and TFC each own 33.83 per cent of Kenya Hotel Properties, the holding company that owns Intercontinental Hotels.
According to Orumoi, KHP was technically insolvent since it cannot service its Ksh717 million debt that is owed to Stanbic Bank.
“KHP is technically insolvent since its current liabilities (Sh717 million) exceeds current income (Sh206 million) by Sh511 million,” Mr Orumoi stated.
The hotel that has not made a profit in 10 years made an Sh113.7 million loss last year.
Some creditors threatened to have KHP blacklisted at the Credit Reference Bureau (CRB).
The hotel is said to have cleared the entire second floor since the rooms are in an unserviceable condition.