Madhvani Group retain Umubano Hotel brand name after takeover

Madhvani Group will retain the Umubano Hotel brand name after taking over the facility over the weekend in a deal valued at $13 million (about Rwf11 billion).
Umubano Hotel swimming pool in an open expanse that serves for sunbathing and relaxation to visitors to the facility.  The Madhvani Group, which formally took over the hotel on Fri....
Umubano Hotel swimming pool in an open expanse that serves for sunbathing and relaxation to visitors to the facility. The Madhvani Group, which formally took over the hotel on Fri....

Madhvani Group will retain the Umubano Hotel brand name after taking over the facility over the weekend in a deal valued at $13 million (about Rwf11 billion).

Madhvani Group is a Ugandan-based conglomerate with interests in sugar processing, ethanol production, oil and soap, floriculture, leisure and hospitality sectors, among others.

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Umubano Hotel as seen from the back side. File.

The acquisition process, which took about five months since the firm first expressed interest in the three-star facility, was completed last week.

In January, Madhivani Group signed a sales agreement that stipulated a due diligence period which ended on Friday last week.

Umubano Hotel has been under liquidation through its holding company, SOPROTEL, since 2014.

The new owners will keep the facility open as they conduct refurbishments and renovations.

In an exclusive interview with The New Times, KP Eswar, the director of corporate affairs at Madhivani Group, said the takeover process would have very minimal disruptions. This includes also retaining the ‘Umubano Hotel’ brand name.

“We are retaining Umubano brand. We have had such deals in a number of countries and we do it with the least possible disturbance,” he said.

Staff members at the hotel will also be retained but fresh interviews will be conducted in various departments as the new owners add more skills to the facility.

Presently, the hotel employs at least 160 staff across the various departments.

“We are also retaining staff at the moment. We will be conducting our own interviews after about three months but we expect most of the staff to be retained. We are not going to disturb the set up in any way,” he said.

Suppliers who have been working with the facility will also continue providing goods and services but will be subjected to quality checks.

Eswar said the rehabilitation and refurbishing process will not cause the hotel to close down or have impact on service delivery.

Major facelift

The refurbishment and renovation costs are estimated to be at between $6 million and $8 million although they are yet to conduct an architectural assessment, he said.

“We are going to refurbish and rehabilitate the facility. It will take some time but in the next six months, you will begin to notice some changes. Refurbishing takes time because we would want to cause minimal interruptions to the staff, operations and guests,” Eswar said.

Eswar noted that the Group is not looking for immediate returns on investment but was keen on having an impact on the hospitality sector.

“We plan on doing a good job and make an impact in the market. We have given a commitment to the government that we will do a good job and we intend to honour our commitment,” he said.

Madhvani Group is also seeking to diversify their asset base in the country and is shopping for another hospitality establishment in the Rwanda.

The next acquisition is likely to be close to a national park in the Kivu region.

“This is not the only property we are acquiring. We are interested in other properties in the hospitality sector. We are looking at properties probably in national parks or Kivu area but we cannot put a timeframe to it,” Eswar said.

The firm remains bullish on the potential of the Rwandan hospitality sector and growing revenue in the hospitality sector.

“We are bullish about Rwanda and we want to have impact here like we have done in Uganda. There is potential in the Rwandan hospitality sector and there is a vision to develop and grow tourism,” he said.

Before the liquidation, the property was owned by the Government of Rwanda and Libyan investors through a then government-owned holding company, LAP Green.

The liquidator of the property, city lawyer Emmanuel Butare, told The New Times that since September 2014 when they put up the property for sale, they received multiple offers but Madhvani Group offered the best deal.

He said part of the firm’s advantage over other bidders was their plan to take over with minimal disruptions.

Madhvani Group runs a number of high-end hospitality establishments in Uganda and Kenya.

Among the establishments include Mara Leisure Camp in Kenya, and Chobe Safari Lodge, Mweya Safari Lodge and Paraa Safari Lodge in Uganda.

Their entry into the Rwandan market is expected to reinvigorate the Umubano facility, which is one of the oldest hotels in the country.

The hotel has about 100 rooms with 14 suites, four conference rooms, a swimming pool and a tennis court.

The takeover will see Madhvani Group compete with other internationally renowned hotel brands such as Radisson Blu, Marriott, Serena and Golden Tulip, which are currently dominating the high-end market.

editorial@newtimes.co.rw

 

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