The Social Security and National Investment Trust (SSNIT) has justified its decision to sell 60% of its shares in four hotels.
The Trust asserted that it is the sole feasible solution to restore the hotels’ financial stability, as the current situation renders other alternatives unviable.
SSNIT’s Director General, Kofi Bosompem Osafo-Maafo, stated that the Trust has decided that replacing management would not be a viable solution, given the hotels’ persistent and significant financial losses, making a change in ownership the most practical solution.
“We’ve been through quite a lengthy process to do so. Bear in mind, we’ve also tried having external management companies running the SSNIT hotels and that hasn’t resolved the problem either. So, for us, we look at it twofold, that we are looking to resolve a problem and do so with the introduction of a strategic investor and we outlined the reasons there.”
“Consistent losses by almost all of our hotels. I know you are aware that Labadi doesn’t make a profit, but the returns are below [par]. They haven’t paid us any dividends with the exception of Labadi”.
Kofi Bosompem Osafo-Maafo
Osafo-Maafo added that Labadi Beach Resort only began generating profits and paying dividends in the last two years, emphasizing that the hotel had consistently incurred losses since its inception, with the recent profitability being a rare exception.
Accordingly, Osafo-Maafo rationalized the decision to include Labadi Beach Hotel in the sale, despite its recent profitability.
He explained that the decision was driven by SSNIT’s goal to maximize its financial returns, as the current profits generated by the hotel were deemed insufficient and not aligned with the trust’s investment objectives.
“We want to maximize what we get out of it and the question that I asked somebody the other day is if you were selling your car or even your house if you were selling your house, you’d attempt to actually paint it”.
“You wouldn’t wait for your car to be put on stones and then say, now this is the time to sell it. You make it look good. There’s no reason why if a business is doing well and we seek to maximize capital from it to invest elsewhere, we shouldn’t do so.”
Kofi Bosompem Osafo-Maafo
Osafo-Maafo pointed out that the returns on Labadi Beach Hotel’s investment are below the expected threshold, and considering the opportunity cost, the cash tied up in the hotel could be better utilized elsewhere, generating higher returns or greater value for the Trust.
“So why not? There’s a good investment rationale for that”. – Kofi Bosompem Osafo-Maafo
SSNIT Debunks Freddie Blay’s $200m Bid Claim
Moreover, Kofi Bosompem Osafo-Maafo refuted allegations made by Freddie Blay, former National Chairman of the NPP, that SSNIT turned down a $200 million offer from his son’s company to acquire a 60% stake in its hotels.
Osafo-Maafo clarified that the proposal submitted by Spartan Ives failed to pass the initial evaluation stage of the bidding process and was therefore not considered further.
“The claim that has been made by Mr Freddy Blay that his son’s company, Spartan Ives bid 150 to 200 million dollars and SSNIT turned it down cannot be substantiated. For the process, you first go through an evaluation panel and score. Once scored and you get past the pass mark we then assess your financial proposal. That is the process and that is what the law requires us to do”.
“We did exactly that. Spartan Ives did not get past the evaluation stage. Their technical proposal was weak and they scored below the required 50% so their financial proposal was not even assessed. The envelope was not even opened. It was returned to them. That is what the law requires us to do”.
Kofi Bosompem Osafo-Maafo
He emphasized that the claim that SSNIT received an offer of $150-200 million and rejected it is misleading, as the proposal was never formally submitted or evaluated, and therefore, no decision was made regarding its acceptance or rejection.
The clarification comes in response to a disclosure by Freddy Blay, Board Chairman of GNPC, that his son had expressed interest in purchasing SSNIT’s shares in certain hotels, which were put up for sale in 2022, sparking controversy and necessitating a clarification from SSNIT.
READ ALSO: Okyeame Kwame Recounts How His Wife Prevented Him From Dissing Obrafour
