Sale of 60% stake in hotels: SSNIT learn lessons — Deal on hold

The Social Security and National Insurance Trust (SSNIT) says it has learnt lessons from the ongoing sale of 60 per cent stake in six of its hotels which has attracted widespread condemnation from sections of the public.


It said that much as the Trust duly followed all laid down processes leading to the selection of a strategic investor, Rock City Hotels, it will, in the future, also undertake broader stakeholder consultations before beginning any processes to derisk its investments in its assets.

“The lesson we have learnt is that we should have broadly engaged our stakeholders to explain every reason for our action because whatever we do is in the best interest of all of us and the pension scheme.

We have started the consultations now and although the negotiations on the deal have stalled, we will open up fully to our stakeholders to enable them to appreciate the rationale for the decisions and the transparent processes we will follow per the Procurement Act to avoid any misconceptions,” he assured as he broke his silence on the deal for the first time,” Director-General of SSNIT, Kofi Bosompem Osafo-Maafo assured.

He was addressing a select number of journalists at Aburi in the Eastern Region at the weekend as he first broke his silence over the deal.

Objections to deal

The sale of a 60 per cent stake in the six hotels of SSNIT has generated a lot of debate and public uproar in the last few weeks after the Member of Parliament for North Tongu, Okudzeto Ablakwa, questioned the move and consequently, filed a petition with CHRAJ accordingly.

Meanwhile, the industry regulator, National Pensions Regulatory Authority (NPRA) has directed SSNIT to suspend ongoing negotiations with Rock City over the sale of four hotels.

On June 28, 2024, the NPRA communicated to SSNIT saying, “As you may be aware, section 67 (2) of the [National Pensions] Act requires us to issue relevant guidelines to guide your investment decisions.”

“In furtherance of this requirement, you are hereby directed by the board of the authority to suspend all the processes seeking to engage Rock City Hotel as the strategic investor in a matter of the sale of the above hotels.”

Due process

Walking journalists through a step-by-step process undertaken by the Trust according to laid down rules, Mr Osafo-Maafo said the “SSNIT’s board constituted a steering committee to drive the entire process. 

The committee comprised all the board chairpersons of the various hotels, three board members and some management staff from SSNIT.

SSNIT went through International Competitive Tendering (ICT) processes as prescribed by the Public Procurement Act, 2003 (ACT 663), as amended by ACT 914, for the selection of a strategic investor.

First, the director-general said the Trust engaged a Transaction Advisor through International Competitive Tendering (ICT) method of procurement, with the publication of adverts in the Daily Graphic on November 14, 2018 and in the Ghanaian Times on November 15, 2018.

“The advertisement was also published in an international magazine, The Economist in its January 5-11, 2019 edition. As of the January 16, 2019 deadline, 15 firms had expressed interest in submitting bids. Six firms were shortlisted and issued with Request for Proposal (RFP) documents”, he said.

Transaction advisor

Mr Osafo-Maafo said SEM Capital, among others, placed a bid and was selected based on the fact the company’s bid price was the lowest received. 

“The highest bid was $1,363,000 made by KPMG. After a detailed Technical and Financial Evaluation of all the bids, SEM Capital emerged as the most competitive and was, therefore, selected as the Transaction Advisor.

He said the approval was sought from the Central Tender Review Committee (CTRC) for the selection of a Transaction Advisor on December 12, 2019, and it was granted on December 24, 2019. 

He said SEM Capital handled the valuation of the six hotels across three regions, helped SSNIT prepare all the documents for the selection process, undertook due diligence and set up the data room for the potential bidders.

Mr Osafo-Maafo said fees charged included fees for the four firms including SEM for the consultancy work done relating to six hotels across three regions and shared between four firms.

“To date, SEM has been paid 80 per cent of the amount, with the final payment due on completion of the transaction,” he added.


Selection of strategic investor

The SSNIT director-general said the independent Transaction Advisor guided the selection of a strategic investor.

“Advertisements for an Expression of Interest (EOI) for a Strategic Partner for SSNIT Hotels were placed in the Daily Graphic on February 3, 2022, and in the Ghanaian Times on February 7, 2022. The advertisement was also published in the Economist Magazine on February 26, 2022.

A total of nine companies responded to the advertisements by submitting proposals on the March 23, 2022 deadline’’, he said.

He said the Entity Tender Committee (ETC), on May 25, 2022 considered the evaluation report on the EOI and approved the recommendation to invite the six firms that qualified in the evaluation of the EOI to submit Technical and Financial Proposals for Private Participation in SSNIT Owned Hotels: The six were Rock City Hotel Limited; Yaw Addo Development; Spartan-Ives; Temple Investments; Westridge Developers Ghana Limited and Luxor Hotels Limited.


Based on the RFP, no bidder was allowed to become the Preferred Bidder for more than two Lots. Rock City bid for all six hotels and was the only bidder for Lots 2 and 3. 

Using evidence from the report to buttress his point, he said Rock City Hotel submitted the best and strongest technical and financial proposal among those received.

“Rock City was the best Bidder for all Lots and they chose Lots 1 and 2 as their preferred Lots. Consequently, Rock City started negotiations with SSNIT to buy a 60 per cent stake in each of the four hotels (Labadi Beach Hotel, La Palm Royal Beach Resort, Ridge Royal Hotel and Elmina Beach Resort).

Mr Osafo-Maafo said, “Given the criteria in the RFP, bids for the Busua Beach Resort and the Trust Lodge were considered to be unsuccessful. They were not covered in this process, adding that the negotiation process has not yet been concluded.”



He explained further that the Price of Recent Investment was recommended as the most appropriate methodology.

“This values the hotel based on recent international transactions of hotels in the same category or with similar star ratings. This is done on a price-per-room basis or what is called a price-per-key basis.

On that basis, the total bid by Rock City Hotels (RCH) for the four hotels was above the valuation placed on the hotels. RCH’s total bid for 60 per cent was $61.2 million compared to the total value of $59.1 million.” He said.

Mr Osafo-Maafo said Rock City Hotel’s bids offered for Lot 1 (Labadi Beach Hotel and La Palm Royal), was more than the combined bid of the other two bidders.

“It was also more than the valuation placed on the 60 per cent stake in the hotels by the Technical Advisors. Rock City Hotel’s bid for Lot 2 (Ridge Royal Hotel and Elmina Beach Resort) was the only bid received. Similarly, that for Lot 3 was the only bid received,” he said.

With evidence from the reports, he demonstrated how Rick City won.

Mr Osafo-Maafo said there was no malice or any underground dealing as alleged and gave the assurance that all would be done to ensure that the objectives for which the hotels were placed on offer were well met in the interest of contributors and stakeholders of the scheme.

Connect With Us : 0242202447 | 0551484843 | 0266361755 | 059 199 7513 |

Like what you see?

Hit the buttons below to follow us, you won't regret it...