Aya Group’s Pearl of Africa Hotel in Nakasero has been advertised for sale to recover debts for a financial institution.
On Monday, auctioneers from Armstrong Limited advertised the sale of the five star hotel in the leafy Nakasero environs which spans 32.000 square meters and comprises 23 floors and 296 rooms.
“We shall proceed to sell the property unless the judgment debtor pays to the entire outstanding decretal sum including interest) and our fees,” the auctioneers say in the advertisement.
The auction stems from a court case in which Industrial Development Corporation of South Africa Ltd secured an order allowing them to put the hotel up for sale to recover over $118million (Shs429billion) from Aya Group.
In 2021, Aya Investments applied for a temporary injunction stopping the sale of its hotel by Industrial Development Corporation of South Africa Ltd.
This was after the South African company indicated that it wanted to sell the hotel to recover the money lent to Aya.
The case stems from 2007 when Aya entered into financing agreements with the South African company while constructing the hotel in Nakasero but according to Aya, misunderstandings developed mid-way, with accusations and counter accusations.
Aya in his defence to court, Aya said the South African company committed several breaches of the financing agreements, which resulted in gross delay of hotel operations and the heavy losses occasioned.
In February this year, the liquidation process of the AYA Investments Uganda Ltd commenced, and court-appointed Robert Mugabe, the director of insolvency and receivership at the Uganda Registration Services Bureau (URSB), the official receiver, and subsequently, the provisional liquidator.
Several entities including meat processing company, Fresh Cuts and Sanlam General Insurance have in the past claimed that Aya Hotel was yet to settle outstanding debts with them.
In 2018, KCCA threatened to close the hotel over failure to pay local hotel tax that had accumulated to almost Shs 34 million whereas power distributor, UMEME was at one time demanding over shs800million from the hotel.