Ubumwe Grande Hotel was Monday morning auctioned for $34,053,888 (about Rwf30.2 billion) after months of disputes among the shareholders resulting in failure to honour a loan of $18m from KCB Rwanda.
The property was previously owned by Alykhan Karmali of Mukwano Group and Private Sector Federation Chairman Robert Bafakulera and global multi-national, Chaudhary Group (CG Corp Global).
During the auction held at the hotel that is based in downtown Kigali City, Hassan Gasana representing Umubano Industries Ltd. won the auction beating four other bidders.
Sources say that Umubano Industries is fully owned by Mukwano Group an enterprise of one of the former owners of the facility.
Other bidders were Edouard Munyaneza, James Gasingwa, Omari Kabungo and Oswald Afrika, most who battled it out to the last minute.
On completion of the auction, the new owners successfully verified that they have the capital co-financed by Equity Bank.
Lawyer Joseph Ngabonziza oversaw the auction.
KCB Rwanda in September this year wrote to Rwanda Development Board notifying them of the intention to foreclose on the lucrative facility for unpaid loans of over $18m.
The bank preferred an auction after establishing that despite the shareholders’ capacity to pay off the loan; they have failed to settle internal disputes among them.
The disputes are said to have arose following an alleged breach of an agreement that CG Corp would manage the property under its ‘The Zinc’ brand.
However, it is alleged that the two partners (Bafakulera and Karmali) unilaterally terminated the management agreement about three months prior to opening.
The property has been subject to several legal procedures including litigation at the Nyarugenge Commercial Court in Kigali as well as arbitration processes in Dubai.