BPOPF avoids Hilton hurdle

SHARE   |   Wednesday, 08 May 2019   |   By Ricardo Kanono
BPOPF avoids Hilton hurdle

Away from the excitement surrounding the opening of the prestigious Hilton Garden Inn in the up market Central Business District (Gaborone) in Q1 2019 , investigations by The Patriot on Sunday has uncovered correspondence showing that the development of the hotel has not been smooth sailing.

The latest addition to the local hospitality industry, Hilton Garden Inn, whose primary shareholders are Botswana Public Officers Pensions Fund (BPOPF) and local investor M3, is located in the heart of capital city's Central Business District (CBD) at Peelo Place. It caters for both business and leisure guests in upscale, affordable accommodation.

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As far back as February 2018, the BPOPF had to respond to a proposal from M3 requesting to retain a portion of the Hilton Development in order to operate a restaurant. The board was grappling with the decision whether to accede to M3 request to retain a portion of the Hilton building equivalent to their equity amount of P26 million, or that BPOPF buy out M3.

Briefing trustees at a board meeting of May 2018, the Finance and Investment Committee, revealed that Messidor Investments-the asset manager of the Hilton development- encountered some practical challenges with the implementation of the first option [allowing M3 to retain a portion] as the design of the development could not accomodate such division. The design of the building, which has been named Peelo Place, could not accomodate such division when taking into consideration issues of access, fire designs, security and services.

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The available option seemed to be a buy out. However, Messidor warned that buying out M3 poses a serious reputational threat/ risk to BPOPF in so far as it can be regarded as a deviation from the Fund's citizen economic empowerment policy stand. Further, an attempt to buy out M3 posed serious legal risk, should the investor (M3) contest the decision leading to a protracted and costly litigation which might jeopardise BPOPF's contractual relationship with Hilton Worldwide.

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Notwithstanding the hurdles, General Manager of Hilton Garden Inn was upbeat about opening a hotel that will focus on ensuring every guest experience is simply on another level, whether guests join for a hotel stay,a quick meal, or a conference meeting. The hotel is committed to realising Hilton Garden Inn’s goal to make each guest’s stay better and brighter.



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