The $40 million five-star Ubumwe Grand Hotel, formerly known as Zinc Hotel, in Kigali. PHOTO | CYRIL NDEGEYA
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According to sources privy to the matter who talked to The EastAfrican, as the hotel neared completion, Mukwano Group cancelled the management contract of the hotel without the consent of Zinc, the company contracted to run the hotel for 15 years.
Two investors are fighting over ownership of Ubumwe Grand Hotel, formerly known as Zinc Hotel, following the termination of a management contract.
The $40 million five-star property in Kigali is owned by three partners: CG Corp Global, who came in with the Zinc Hotel brand; the Mukwano Group — who own a combined 80 per cent stake; and Robert Bapfakurera — who owns a 20 per cent stake.
The hotel, which was part of a global chain owned by Nepalese billionaire Binod Chaudhary, changed its name to Ubumwe before it opened its doors to the public ahead of the African Union Summit in July.
According to sources privy to the matter who talked to The EastAfrican, as the hotel neared completion, Mukwano Group cancelled the management contract of the hotel without the consent of Zinc, the company contracted to run the hotel for 15 years.
Mukwano also changed the hotel’s name despite a court order barring it from doing so.
“Two of the three shareholders of that property had a dispute, so we tried informal mediation, but it became clear that their dispute was more complicated than we had thought,” said RDB chief executive Francis Gatare.
CG Corp Global/Zinc through their lawyer Trust Law Chambers, went to Nyarugenge Commercial Court to nullify the cancellation of the management contract but Mukwano appealed the decision at the Commercial High Court.
According to Apollo Nkunda, the lawyer representing Zinc, the Commercial High Court ruled that the case be reviewed. “We stopped Zinc from managing the hotel and the issue is in arbitration,” said Robert Bapfakurera.
This is not the first time a management company is falling out with a local hotel investor. Earlier this year, Mickor Investment Holdings Ltd — the owners of Hotel des Mille Collines — terminated a management contract with Kempinski over high management costs.
Rwanda is currently hosting the African Hotel Investment Forum, where a number of global hotel chains, as well as other businesses in the hospitality ecosystem, like airlines, are looking at the opportunities and challenges faced in the African market.
