Why SSNIT wants to sell La Palm, Labadi hotels

The Social Security and National Insurance Trust (SSNIT) has been justifying the sale of its 60% stake in four of its hotels to Rock City Hotel Limited, following public resentment since news broke of the transaction.

According to SSNIT, Rock City Hotel Limited submitted the best and strongest technical and financial proposal amongst those received to purchase the 60% stake in the hotels.

SSNIT posits that the strongest technical and financial proposal from Rock City Hotel Limited was one of the factors leading to their being chosen as the right firm to purchase SSNIT’s stake in the hotels.

“Rock City bid for all six hotels and they were the only bidder for Lots 2 and 3. Rock City Hotel submitted the best and strongest technical and financial proposal among those received.

Rock City was the best bidder for all Lots and they chose Lots 1 and 2 as their preferred Lots,” SSNIT has clarified.

Given the criteria in the Request for Proposal (RFP), bids for Busua Beach Resort and the Trust Lodge were considered unsuccessful.

Consequently, Rock City started negotiations with SSNIT to buy a 60% stake in each of the four hotels: Labadi Beach Hotel, La Palm Royal Beach Resort, Ridge Royal Hotel and Elmina Beach Resort.


According to a statement issued by the Trust, the hotels were valued independently by the Transaction Advisor (TA), who brought in a reputable specialist firm. The valuation methods used were replacement cost basis, going concern basis and the price of recent investment methodology, which valued the hotel based on recent international transactions of hotels in the same category or with similar star ratings.

On that basis, SSNIT said the total bid by Rock City for the four hotels was above the valuation placed on the hotels, with a total bid for the 60% as USD 61.2 million compared to the total value of USD 59.1 million.

“Rock City Hotel’s bids offered for Lot 1 (Labadi Beach Hotel and La Palm Royal) were more than the combined bids of the other two bidders. It was also more than the valuation placed on the 60% stake in the hotels by the TA. Rock City Hotel’s bid for Lot 2 (Ridge Royal Hotel and Elmina Beach Resort) was the only bid received. Similarly, that for Lot 3 was the only bid received,” SSNIT added.


In its justification, SSNIT indicated that apart from raising capital and finding experts to manage the hotels, the ultimate goal for the sale of its stake was to manage investment risks to improve investment returns.

SSNIT said the key to managing investment risks was the implementation of an asset allocation policy and undertaking investments in line with the policy.

However, the Trust noted that SSNIT restructuring of non-performing companies was a priority in its decision to give out the hotels.

Explaining the rationale for the investment decision for the sale of part of SSNIT’s holdings in the hotels, it cited consistent losses, frequent requests for maintenance funding, capital injections required, high capital expenditures and the need for strategic partnership.


SSNIT has said that its board caused a steering committee to be set up, which comprised all the board chairpersons of the various hotels, three board members and some management staff from SSNIT to lead the procurement process.

In accordance with the Public Procurement Act 2003 (Act 663), as amended by Act 914, the committee followed International Competitive Tendering (ICT) processes to select a strategic investor by placing advertisements in the dailies in November 2018 and January 2019.

As of the January 16, 2019 deadline, 15 firms had expressed interest in submitting bids; six firms were shortlisted and issued Request for Proposal (RFP) documents.

Approval was sought from the Central Tender Review Committee (CTRC) for the selection of a transaction advisor on December 12, 2019 and was granted on December 24, 2019.

The 15 firms included Phoenix Africa Capital Management Ltd. and Standard Charted Bank, Deloitte and Touché, PwC, EY Advisory Services, Cornerstone Capital Advisors, KPMG, SEM, Capital Advisors and Colliers International among others.

An evaluation panel recommended EY Advisory Limited, Colliers International, KPMG Limited, PwC, Deloitte & Touché and SEM Capital as firms with the best scores to be invited to submit technical and financial proposals for a transaction advisor.

Five firms submitted technical and financial proposals for the provision of consultancy services, but Colliers International failed to submit a proposal.

SEM Capital’s bid was the lowest received and the highest was USD 1,363,000 made by KPMG. After a detailed technical and financial evaluation of all the bids, SEM Capital emerged as the most competitive and was, therefore, selected as the Transaction Advisor.


The independent transaction advisor guided the selection of a strategic investor by first advertising for an Expression of Interest (EOI) for a strategic partner for SSNIT Hotels.

A total of nine companies responded to the advertisements by submitting proposals.

The Entity Tender Committee (ETC) considered the evaluation report on the EOI and approved the recommendation to invite the six firms that qualified in the evaluation of the EOI to submit technical and financial proposals for private participation in SSNIT-owned hotels.

The six companies were; Rock City Hotel Limited, Yaw Addo Development, Spartan-Ives, Temple Investments, Westridge Developers Ghana Limited and Luxor Hotels Limited.


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