ethiopiantimes

June 6, 2011

Share Lone Bidder Offers 64m Br for Langano Bekele Molla

Filed under: Ethiopia — ethiopiantimes @ 3:16 pm
Tags:

Mulugeta Tesfakiros (Left), one of the three shareholders of AKAKAS Logistics, looks to the hospitality industry. Langano Bekele Molla Hotel’s beach where guests can stroll to and relax.

An Ethiopian businessman has made a rare offer to acquire a property alongside Lake Langano, which has been a popular weekend hangout for middle and upper class Ethiopians and foreign nationals residing in Ethiopia for decades.

Mulugeta Tesfakiros, one of the three shareholders of AKAKAS Logistics who has become better known for his real estate engagements over recent years, offered 64 million Br to acquire Langano Bekele Molla Hotel, on May 24, 2011.

The state owned Commercial Bank of Ethiopia (CBE) put the hotel up for auction for the third time since it took possession of the property from its original owners eight months ago.

Mulugeta’s offer is four million Birr more than the threshold the bank had set in order to recover the loans it had advanced to a company owned by the progeny of the late Bekele Molla, a pioneer in the concept of chain operation in the hospitality industry.

The hotel is located on a 264,734sqm plot on the remarkable beach of Lake Langano, 220km south of Addis Abeba in Arsi Negele Wereda, Oromia Regional State.

His decendants lost this prime property after waging a long and bitter legal battle against CBE that was resolved when the Cassation Bench of the Federal Supreme Court ruled in the latter’s favour in March 2010.

At the heart of the legal battled lay whether or not the family had put up the property as collateral for loans obtained by National Trading Corp, a company owned by Bekele’s two sons: Alemayehu and Asrat.

The company took loans from CBE for the acquisition and renovation of Tana Shopping Mall in Merkato. It bought Tana from the then Ethiopian Privatisation Agency, now the Privatisation and Public Enterprises Supervising Agency (PPESA) for 68 million Br in September 1995.

With the subsequent default on the loans, CBE foreclosed the mall in April 2001. One of the tenants at the time, Dashen Bank, acquired the property for 53.4 million Br in the same year, but the bank’s attempt to auction the hotel in Langano had proven very difficult.

The family fought CBE for almost a decade, arguing that the hotel was put up as collateral only until National Trading took over Tana, which subsequently became the only collateral for its loan agreement with the bank. The contract registration was conducted by a bureau of the regional state without the legal mandate to do so, nullifying the contract, they argued.

They won their argument at the Federal High Court, which passed a ruling that was upheld by the Supreme Court before justices at the Cassation Bench of the same court overturned the rulings by lower courts.

Subsequently, CBE took possession of the property and has been trying to auction it, with little success. Last week’s offer from Mulugeta, 47, came as a surprise for many in Addis Abeba.

A resident of Boston in the United States (US) for 12 years before he returned to Ethiopia in 1997, Mulugeta entered into the Ethiopian private sector with involvement in logistics. After mining salt in Afar Regional State, he finally formed AKAKAS, a logistics company, with Akalu Gelleta and Kassahun Abery (PhD).

His major business venture happened over the past seven years when he became involved in the real estate market. Mulugeta has sites under development on plots located behind Ayat and Lebu areas.

Mulugeta, a father of four, had left to the US in 1984. He comes from a business background. His father, Tesfakiros W. Sellasie, was a well-known businessman in Merkato. He was murdered by the military government in 1976, together with several other businessmen in the area, all accused of hoarding merchandise.

Known to have an outgoing and sociable personality, entering into the hospitality industry is a natural move for Mulugeta, close associates said. He may be interested in making an exit from the real estate sector to focus on the hospitality sector, according to these close associates of his.

He was the sole bidder for the property, which has been abandoned and neglected for the past eight months and certainly requires substantial investment and renovation.

In his proposal to the bank, Mulugeta pledged to invest in refurnishing the property and putting up new structures, sources at the CBE told Fortune.

Both the bank and Mulugeta declined to comment.

Advertisements

2 Comments »

  1. Mulugeta’s personality is the good-natured type, warm-hearted, friendly and sweet to all those around him. He is an affectionate person, and gets along easily with others which sets him to be one of the many ERRAND BOYS within the MAFIOZI–WELDIA. He had no vision or mission as a parking lot attendant, this opportunity may never come back. He then become a certified PIMP between some members of the government authorities and the Mafiozi.
    Off course as an ERRAND BOY HE INDEED MAKES THE BEST COFFEE AND KNOWS HOW TO COOK AND CLEAN. WHAT A TALLENT !!! WHOSE MONEY IS IT ??? REMINDING THAT HE IS INDEED AN ERRAND BOY BUT OF LOW CALIBER.

    Comment by taitu menelik — June 10, 2011 @ 6:33 am | Reply

    • Hi Taitu Menelik,
      You seem to know a lot about Mulugeta; please tell me more about his professional background and what was he doing in the US?

      Birtukan

      Comment by Birtukan — January 2, 2012 @ 11:31 am | Reply


RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog at WordPress.com.

%d bloggers like this: