Simba Corporation, a family-owned Kenyan firm with interests in automotive and hospitality sectors, has expanded its hotel portfolio after signing an agreement to buy a 35 per cent stake in Hemingways Holdings Ltd.
Simba Corp said Monday the deal, whose value remains undisclosed, would enable it strengthen its position in the hotel industry, while Hemingways said the proceeds of the share sale would be used to finance its growth and expansion programmes.
The auto dealer, Simba, made its first foray into hospitality sector in 2010 aiming to provide luxury hotels for travellers. It currently owns Acacia Premier hotel in Kisumu and holds significant stakes in Olare Mara Kempinski (Masai Mara) and Villa Rosa Kempinski (Nairobi).
“Through our partnership with Hemingways we intend to continue to build on this strategy. This investment is therefore aligned to Simba’s goal of creating a substantial hospitality business platform with the intention to expand national and within the region” said Adil Popat, Simba Corp’s chief executive.
The acquisition comes barely a month after Mr Popat announced a freeze of plans to set up a chain of mid-priced hotels across Kenya, citing a glut in the market.
It also comes at a time when a wave of mergers and acquisitions are sweeping across the Kenyan investment landscape.
Last week, regional oil marketer Hass Petroleum sold a 40 per cent stake to Gulf’s Oman Trading International in search for capital to strengthen its operations.
The Kenyan-based Hass is facing stiff competition in its oil business, controlling a paltry 1.9 per cent the market share in the fuel sales.
Global oil marketer Shell is also gearing up to sell its 20 per cent stake in Vivo Energy for $250 million to Vitol subject to regulatory approvals.
After the transaction, Vitol would control a 60 per cent majority stake in Vivo, while private equity fund Helios Investment Partners retains 40 per cent.
Vitol and Helios jointly operate 1,600 stations across 16 African countries through Vivo Energy.