Reasons for sale of Sentrim portfolio unclear
Owner has said little about why he’s leaving an industry many rich people are eager to enter
In recent times, few events have sent shock waves through the hospitality industry that can match an announcement by business mogul Jagdesh Patel last month that he is selling his hotel portfolio, which boasts eight luxurious establishments across the country.
The tycoon and his business associates remain tight-lipped about their reason for exiting a door that several super rich individuals are fighting to go through. Sentrim has hired Uk-owned property manager Knight Frank to oversee the landmark sale that is likely to attract numerous offers.
In the enviable hospitality portfolio are 680 Hotel, Hotel Boulevard, Castle Royal Mombasa, Sentrim Elementaita, Sentrim Amboseli, Sentrim Mara, and Sentrim Samburu.
Although Sentrim and Knight Frank have played their cards very close to their chests regarding the portfolio’s ownership and sale, the has uncovered fresh details, previously a preserve of very few of Mr Patel’s family and friends.
The 680 Hotel, which got its name from the number of beds it had when its doors opened, is the biggest moneymaker for the group, raking in Sh213 million annually. Its average gross profit for the hotel unit alone has been Sh59.6 million for the last five years.
Knight Frank holds that profit from 680 Hotel can either be maximised either by renovating the building into an office block, or letting the three-star hotel continue its good run.
Sentrim Elementaita has been raking in Sh151 million annually in the last three years, with an average gross profit of Sh68.6 million.
Other annual incomes mentioned in the documents are: oyal Castle Mombasa (Sh97.4 million, with a gross profit of Sh68.6), Sentrim Mara (Sh84.4 million, with a gross profit of Sh57.3), and Sentrim Tsavo (Sh40.2 million, with a gross profit of Sh25.6 million).
Inside the Sentrim group is a complicated ownership web that has buried the individual owners’ identities is several layers of local and offshore trusts and companies.
Documents sent to potential buyers only reveal three individuals as minority shareholders, with companies as majority shareholders. Mr Patel, Mr Rajnikant M. Shah and Mr Harji V. Hirani each own a share in local companies that own hotels in the Sentrim group.
The Nairobi-registered firms, Mayhouse Ltd (680), Chezer Investments (Boulevard), Newgate Management Ltd (Castle Royal Mombasa) and Operation Castle (Sentrim Elementaita) own the
buildings and land on which they sit.
Mr Patel, Mr Shah and Mr Hirani own one share in Mayhouse, Chezer, Newgate and Operation Castle while their offshore companies own the other 128,000 shares.
The four local companies are, in turn, majority-owned by four companies registered in the British Virgin Islands and Mauritius.
The British Virgin Islands firm, Mintea Corporation Ltd, owns 997 shares in Mayhouse and, by extension, the 680 Hotel. Gartinero Company Ltd owns 124,997 shares in Chezer Investments and by extension, the Boulevard Hotel.
The Panama papers indicate that Mr Patel, Mr Shah and Mr Hirani have shares in Mintea and Gartinero, alongside three trusts with almost similar names.
Matco Ltd, as Trustees of the 1306 Trust, Matco Ltd as Trustees of the 2904 Trust, and Matco Ltd as Trustees of the 3006 Trust are shareholders in both Gartinero and Mintea.
Mintea is also co-owned by a shadowy trust — the Lombard Trust — whose country of registration is not indicated in the Panama papers.
Mauritius-registered Simply Green Company Ltd has 997 shares in Newgate Management, which owns Castle Royal in Mombasa. Kenya Wind Company Ltd, another firm registered in Mauritius, has 997 shares in Operation Castle, which owns Sentrim Elementaita.
in 2016 named Mintea and Gartinero among 214,000 firms registered offshore by wealthy individuals looking to hide their wealth, avoid heavy tax liabilities in their home countries, and in some instances, even launder the proceeds from crime.
However, the has not found any evidence that Sentrim’s offshore dealings are in any way illegal.
The Sh5.2 billion Knight Frank announced as a guiding price seemed rather conservative, but the consultancy’s head of agency, Mr Anthony Havelock, says it is intended to attract serious buyers, who will battle it out at the auction.
He said the sale offer has attracted interest from both local and foreign investors, but gave no details. Also, he gave no time frame for when the sale will be completed.
Sixeighty Hotel in Nairobi is the Sentrim Groups biggest moneymake, raking in Sh213 million annually.