Equity puts Nyeri hotel on sale to recover its Sh500m

The iconic Mount Kenya Leisure Lodge in Nyeri County is to be auctioned over a Sh500 million Equity Bank debt, adding to the list of borrowers the lender is targeting for repayment default. 

The hotel, which has a four-storey lodging and conference facilities, sits on 13.6 acres (5.5 hectares) in Naromoru with an estimated monthly income of Sh20 million.

“In total, the hotel has seventy lodging rooms which are let out at Sh8,000 per night and four cottages which are let out at Sh12,000 per night,” Garam Investments Auctioneers said in a notice stating that the facility will be sold when its hammer falls on April 14.

“Bidders will be required to produce a bidding deposit of Sh5 million by way of cash or bankers cheque before being allowed to bid” it added.

Insiders told the Nation that the lodge had defaulted on a loan by Equity Bank.

“All I can disclose is that the Mount Kenya Leisure Lodge owes Equity Bank some Sh500 million or so and its property is marked for auction to recover the money” an official involved in the auction plan said.

Cash-strapped

The planned auction adds to the list of businesses being pursued by the lender.

Only last month, cash-strapped Tuskys Supermarket saw its first real estate asset placed for a public auction over a Sh650 million Equity Bank loan.

The five-storey commercial building, which houses the retailer’s largest store and sits at the junction of Tom Mboya Road and Accra Road in Nairobi. The property was marked for sale on March 2 but the transaction did not proceed after Tuskys obtained a court order blocking the planned auction.

Multiple creditors

This would have been the first major auction of properties linked to Tusker Mattresses Limited, the owner of the Tuskys brand, which has so far only lost merchandise to auctioneers for rent default.

The retailer faces continuing financial distress, which could trigger multiple creditors to seize and forcibly sell its assets estimated at Sh6.67 billion.

In a race to prevent collapse, Tuskys has been seeking to sell a majority stake to a consortium made up of an undisclosed private equity firm.