By Paul Mamattah
Director-General of Social Security and Investment Trust (SSNIT) Kofi Osafo-Marfo, has justified SSNIT’s decision to sell a 60% stake in each of its six hotels, which according to him consistent losses, high capital expenditure requirements, and the need for strategic partnerships, were key factors that influenced this investment decision.
Addressing a press conference in Accra on issues of the sale of SSNIT hotels, he stated that the move is aimed at raising capital to invest in the hotels through a strategic partnership with an experienced investor in the hospitality industry.
Mr Kofi Osafo-Marfo, further explained that by selling part of SSNIT’s holdings in the hotels, the organisation aims to manage investment risks effectively and improve returns on its investments.
Furthermore, the Director-General of SSNIT, underscored the need to restructure non-performing companies within SSNIT and reduce the need for annual capital injections from the Pension Fund to sustain unprofitable hotels.
He noted that the funds generated from the sale will be reinvested in more lucrative opportunities to ensure long-term sustainability and timely payment of pensions.
Mr Kofi Osafo-Marfo, indicated that this decision aligns with SSNIT’s fiduciary duties to maximize returns on investments, maintain financial stability, and prioritize the interests of contributors and pensioners.
He asserted that by seeking a strategic investor with expertise in the hospitality industry, SSNIT is making a strategic move to reinvest the proceeds in more lucrative opportunities, ultimately enhancing the overall benefits for its members.
Commenting on the procurement process for a strategic investor, Mr Kofi Osafo-Marfo, noted that the Entity Tender Committee convened on 25th May 2022, to carefully review the Evaluation of Interest report.
He said the committee sanctioned the decision to invite six esteemed firms, including; Rock City Hotel Limited, Yaw Addo Development, Spartan-Ives, Temple Investments, Westridge Developers Ghana Limited, and Luxor Hotels Limited which had met the criteria during the assessment, to submit both Technical and Financial Proposals for Private Participation in SSNIT owned hotels.
Furthermore, the Director-General, emphasized that no single bidder was granted the status of the preferred bidder for more than two Lots. Notably, Rock City Hotel Limited expressed interest in all six hotels and emerged as the exclusive bidder for Lots 2 and 3.
He said their proposal stood out as the most robust and compelling among the submissions received and based on the evaluation outcomes, Rock City Hotel Limited proved to be the top bidder for all Lots and selected Lots 1 and 2 as their preferred choices.
According to him, Rock City, has submitted a bid that surpasses the valuation suggested by the Independent Transaction Advisor adding that the bid guarantees that SSNIT will obtain a fair market price for the transaction.
As a result, Rock City, has initiated talks with SSNIT to acquire a 60% ownership share in four hotels including, Labadi Beach Hotel, La Palm Royal Beach Resort, Ridge Royal Hotel, and Elmina Beach Resort saying; these discussions align with the Request for Proposal (RFP) guidelines.
He was quick to add that, It is important to note that the negotiation process is still ongoing and has not been finalized at this stage.
Mr Kofi Osafo-Marfo, pledged SSNIT’s Commitment to Sustainability by securing the Scheme’s future through strategic actions aimed at lowering portfolio risks, enhancing investment returns, increasing cost efficiency, and actively addressing outstanding debts with employers and the Government.
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