National Bank of Kenya (NBK) has put up for sale the Nairobi Upper Hill Hotel over a debt of Sh447 million.
Keysian Auctioneers was instructed by the lender to sell the property, which belongs to Mr Geoffrey Wahome Muotia, who has been fighting to block the sale over the years. The auction is scheduled for February 26.
The four-storey property on Mawensi Road in Upper Hill area comprises a lobby with stairway and lifts, hotel reception with operator and reservation area, a business center, a gift shop and a bar.
The hotel also has a French restaurant reception, dining area with open and closed sections, kitchen with scullery section fitted with high and low cabinets, cooking area with cookers, conference halls, among other facilities. The auctioneer said interested buyers must deposit Sh1 million for the property.
“10 percent of the purchase price must be paid to the auctioneer at the fall of the hammer and the balance to be paid in 90 days to the charges,” the notice stated.
Evidence presented in court showed that Mr Muotia was granted an overdraft of Sh10 million, a commercial mortgage of Sh236 million and a term loan of Sh35 million, totaling Sh281 million exclusive of interest and bank charges, in September 2014.
The bank alleged that he defaulted in loan repayment and the lender demanded Sh447 million as at last year.
The hotelier had previously accused the lender of frustrating his efforts of the loan being taken over by another lender by referring him to Credit Reference Bureaus (CRB) thereby ‘clogging his right to redeem his property’.
He claimed in court papers that when registering the charge in April 2014 for Sh281 million, he did massive improvements yet the auctioneer placed the value at Sh700 million as market value and Sh525 million on forced sale.
Mr Muotia added by October 2019, the value had risen to Sh1.05 billion due to general appreciation of the properties in the area and other considerations.
"That despite the above and considering the property appreciation in the Upper Hill area as advised by various Real Estate consultants in their updates to clients, the bank and the auctioneer has placed the value at Sh277.5 million as forced sale value and which is far much lower than the value it was charged in 2014,” he said in application at the Court of Appeal, which was later dismissed.
