Ghion Hotel deal terminated

by yeEthiopiaforums

By Muluken Yewondwossen

The Privatization and Public Enterprises Supervising Authority (PPESA) has terminated the 512 million dollar deal with Aklile Berhan Mekonnen (Prince), who had entered a contract to take over the Ghion Hotel Enterprise.
Wondafrash Assefa, Public Relation head of PPESA, told Capital that the deal was terminated when the investor failed to settle his initial investment. The agency says they waited patiently for the investor for the last several months.  “The investor did not clarify why he delayed the payment. Because of this the agency has made a decision to terminate the deal,” Wondafrash said.

The deal between the two parties was concluded in late August 2010 and the investor was supposed to  come up with 210 million dollars, as his first registered initial capital, by the end of September 2010. PPESA wrote a letter in November to the investor, demanding payment or threatening to terminate the deal. The investor waited for more than three months before asking for more time even after receiving the warning letter. According to the public relation head, the agency has decided to put the hotel up for another auction. But he said that the exact time has not yet been determined.
According to the deal, Aklile, an Ethiopian born investor based in Italy, had to come up with 210 million dollars as his first registered initial capital. The total investment sum would be 310 million dollars, which includes 100 million dollars for the government-shared hotel. The deal added that if the investor spends an additional 300 million dollars in the next five years, he will own 80 percent of the Ghion Hotel. The rest will be state-owned.

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