DEBUNKING PF NONSENSICAL PROPAGANDA ARTICLE
Proud Aushi Musamba Mumba
“HOW HICHILEMA SOLD MUSIO-O-TUNYA INTERCONTINENTAL HOTEL, RAINBOW LODGE AND NATIONAL PARK VALUED FOR $26MILLION SOLD FOR $6.5MILLION”
A clear case of a smear campaign against an individual.
Interesting but there is substance missing in the very nonsensical article being circulated by PF propagandists. The Sun International Bid came with a capital investment of $50 million to build a 3-star (Sun Hotel) and 5-Star (Royal Livingston) on the sites of the old delapidated hotels. The other bidders were for the existing structures only with no additional capital commitments. Sun Internal essentially bid for the land and demolished existing structures. The enduring benefits of the new hotels are still drawing tourists to Livingstone.
Further, Directorship do not mean Ownership. The owners were Sun International. HH and Mukuni were directors in the Zambian operating entity but did not have an ownership stake. When Government decided to privatize the Intercontinental hotel was it just selling the land? It was selling the land and the hotel as was. What the new owners intended to was probably not part of the valuation. The Sun could have gotten land and built elsewhere.
So when evaluating who the successful bidder do you go with a bidder who is just going to continue with the existing infrastructure or someone who commits to invest an additional $50 million to modernise the infrastructure, create more jobs and increase economic activity in the town and nation at large?
It’s also shocking that people are mistakenly equating directorship you shareholding. One is merely an office held while the other confers equity ownership rights. HH and Mukuni were merely non-executive directors of the Zambian subsidiary of Sun International. The most they got out of this was sitting allowances and probably free accommodation and meals.
Also the assumption that there was a conflict of interests on the part of HH is also misconceived. He was not a director in Sun International (the bidder) or any of its subsidiaries at the time of the negotiations. So where does the conflict arise? From the PACRA document printed in 2014, it is not stated the date of appointment as director. Sun was not the second preferred bidder but the first. The cash price offer was second yes, but Sun International was preferred for 2 reasons (1) the additional $50 million they committed to inject in the hotel (2) their experience in running hotel Businesses.
The highest bid for Livingstone hotels only was $10 million by a company/consortium with no experience running hotels.
This bid also included an additional $10 million bid for Intercontinental Hotel in Lusaka. Sun Internation did not bid for Intercontinental hotel.
Based on the PACRA printout 99.998% shareholding was Sun International with the Canadian citizen having 1 nominee share. Sun owned 49,999 shares of the 50,000 issued shares. The 1 share held by Elizabeth, the Canadian citizen (0.00003%) was most likely a nominee shareholder to meet the statutory requirement of having a minimum of 2 shareholders.
Based on the above, it is surprising that people are accusing HH of negotiating a bad deal, when in fact, the deal he negotiated was the best thing that could happen for the tourism industry with proven growth in the Livingstone economy following the upgrades of the hotel.