The Social Security and National Investment Trust (SSNIT) has justified its recent decision to divest 60% of its ownership in four prominent hotels to a private investor. The Trust asserts that this move is essential for revitalizing the hotels’ financial outlook.
The properties involved in this transaction are Labadi Beach Hotel, La Palm Royal Beach Resort, Elmina Beach Resort, and Ridge Royal Hotel.
At a news conference in Accra, SSNIT’s Director General, Kofi Bosompem Osafo-Maafo, underscored the thorough deliberation that preceded this decision. He emphasized that retaining the status quo, including attempts at external management, proved ineffective in reversing the sustained financial losses incurred by these hotels.
“We’ve undertaken extensive due diligence in this process, despite efforts to engage external management firms, and the hotels continued to underperform financially. Therefore, introducing a strategic investor emerged as the most viable solution to address these challenges,” he said.
Regarding the inclusion of Labadi Beach Hotel, which has shown profitability in recent years, Osafo-Maafo defended its inclusion in the sale based on SSNIT’s strategic goal to optimize overall returns.
“When considering the sale of any asset, whether a car or a house, the aim is to maximize its value,” he explained. “While Labadi Beach Hotel has shown profitability, the returns are not considered optimal. We seek to unlock greater value from these assets to better serve our investment objectives.”
He further justified the decision, stating, “The rationale is clear: returns are below expectations, and capital has alternative uses. Therefore, maximizing returns from these assets through strategic divestment is a sound investment rationale.”
The move has sparked debate, but SSNIT remains resolute in its stance, asserting that the decision is in the best interest of maximizing shareholder value and ensuring sustainable financial performance across its portfolio.
