InterContinental Group threatens to pull out of Nigeria
Hundreds may lose their jobs
If InterContinental Hotels Group makes good its threat to pull out of Nigeria by January 18 over breach of contract and debt pile up by a receiver/manager appointed by a creditor bank, hundreds of Nigerians may again lose their jobs.
The IHG, which went into an international management agreement with Milan Industries Ltd, owners of InterContinental Hotel Lagos, in January 2012, had in a notice of termination of the agreement, dated January 3, 2018 expressed its displeasure with a receiver/manager by appointed by a bank following an interim court order.
According to the IHG: “We had, on various occasions, engaged the receiver/manager to ensure the proper management and operation of the hotel as part of IHG’s global hotel network. Despite multiple letters issued to the receiver/manager and Milan dated, inter alia, 18 May 2017, 1June 2017, 14 June 2017, 18 July 2017, 31 October 2017, 12 November 2017, 15 December 2017, requesting the cooperation of the receiver/manager with IHG in order to ensure that the Hotel maintains its operating licence and to avoid a material breach of the agreement, a significant amount of fees outstanding in the sum of USD 3, 142,324/ NGN995,223,818 owed to IHG remain unpaid and continue to accrue on a daily basis.
“Furthermore, clause 16.1 empowers IHG to terminate immediately the agreement upon the appointment of an administrator or receiver over the assets of Milan whereupon the Marks, Licence and Software Licence granted for the use of Milan by IHG shall cease; access of the Hotel to IHG’s reservations system will be suspended and the management and operation of the Hotel by IHG shall terminate. Take note that this letter formally serves as notice of termination of the agreement with effect from 18 January, 2018.”
Milan had taken a facility from the bank to part-finance the five-star hotel on Victoria Island, Lagos and managed by IHG. The Milan Group, it was gathered, has up till 2021 to pay back the facility but the bank obtained an interim order to take over the management of the hotel.
The move has, however, not gone down well with IHG, which has severally complained about the way and manner the receiver/manager has been going about the assignment culminating amongst other issues alleged, “failure to pay in full and on time all amounts due to IHG,” developments the international hotel group considers as a fundamental breach of existing agreements.
The IHG also complained in an earlier letter dated December 26, 2017 that: “We are highly concerned that the Hotel’s payroll has been suspended until after the Christmas holidays. This is a further breach of the agreement, and we insist that all relevant payments are made to Hotel employees immediately.”
The hotel group further complained that the service delivery level is being impaired by the omissions highlighted in its letters.
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