Low-cost hospitality group Hotel & Leisure Africa (Hala) has been kicked out of Selous Hotel it has been leasing after failing to pay rentals with arrears ballooning to $133 000.
BY NDAMU SANDU
This forced the owners of the property — Selous Hotel 2010 — to close the hotel on April 2.
Hala took over Selous Hotel in July last year. Selous Hotel 2010 is a subsidiary of Croco Holdings.
The arrears have been accumulating after Hala failed to pay the monthly rental of $23 000 per month.
Hala executive chairman Cornelius Nyahunda told NewsDay on Monday the group had not been evicted, but the parties had failed to agree on rentals.
“We failed to renew our lease. We wanted a lower rental and the landlord was not amenable to that,” Nyahunda said.
But papers in NewsDay’s possession showed that Nyahunda had even acknowledged Hala’s debt to Selous Hotel 2010.
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In a handover of premises and assets agreement signed on April 9, Nyahunda confirmed the hospitality group owed Selous Hotel 2010. “Hala further acknowledges that as at March 31 2015, Hala is indebted to Selous Hotel 2010 in the amount of $133 091,34 excluding legal costs and other related administrative charges which Selous Hotel 2010 shall recover as part of the debt settlement therein,” read the agreement in part.
Hala agreed to take over the employment costs, including settlement of “any statutory payment due or owing to Zimbabwe Revenue Authority, NSSA, pension and unions contribution”.
In an indemnity letter signed by Nyahunda, Hala “irrevocably undertake that in the event of any such claim by any creditor, Hala shall settle any such claims or assume and undertake defence of any action against the company, including legal proceedings and any other related costs and expenses to absolve the company in all respects whatsoever”.
It emerged yesterday that Hala was reneging on paying the employees and was referring them to Croco Holdings.
In a letter to the affected employees, Timothy Sain, Croco Holdings group company secretary said employees liabilities would be settled by Hala.
“Please be advised that all past and present obligations relating to the welfare of the employees at Selous Hotel, including payment of arrear salaries, pensions and other statutory payments and benefits is the responsibility of Hala,” Sain wrote in an April 20 letter addressed to workers’ committee chairman Brighton Tichivangana.
Hala’s model is low cost targeting low income earners. In an interview with NewsDay last year, Nyahunda said the group’s core brand was two-star and they were taking it “to all major administration centres — places like Lupane, Gwanda and Marondera, we would like to be present there”.
“People have to gather and they would need accommodation and meeting places. So we are going to be present in those (areas). Secondly, we have to be in economic hubs — all your towns where there are economic activities like Masvingo and Chiredzi because there is activity happening there,” he said then.
“Thirdly, we are going to leisure areas, be they traditional ones — the old Victoria Falls and Kariba — or the new attractions that have not got accommodation. We would like to tap into those and drive what the policy-makers need to drive.”
The Hala group was incepted in 2010.
Under the group’s portfolio Jacaranda City Lodge, Select Kimberley, Select Karoi, Select Cecil and Select Omadu among others.
Hala also has operations in Zambia, South Africa, Mozambique and Ghana.
