Investment Opportunity – Hotel and Leisure Industry Information Teaser

IMPORTANT NOTICE: This document (the “Information Teaser”) is only intended to give general information regarding an “Investment Opportunity in the Hotel and Leisure Sector” or “the Transaction” and “the Hotel Business” (“the Company”), and does not purport to contain all information that may be required to evaluate any possible transaction and is not intended to form the basis of any investment decision to acquire any part (or all) of the Company. This document cannot be construed as a recommendation, an offer or an invitation to make an offer to acquire any interest or participation in the Company or to enter into any type of contract under any jurisdiction. Recipients of this document should ensure that they comply with all relevant legislation and rules that may be applicable to them. This document has been prepared by ABL Associates (“the Advisors”) together with the management of the Company. The content of this document is not verified by the Advisors or the Company. The Advisors and the Company accept no liability or responsibility whatsoever for the contents, accuracy or completeness of this document (including any statements with respect to projections or prospects of the deal and related assumptions) or for infringement by any recipients of this document of legislation of any nature whatsoever. This document is incomplete without reference to and should be viewed solely in conjunction with, any oral briefing provided by the Advisors. It reflects prevailing conditions and our initial views as of this date which we reserve the right to change. The Advisors are not and shall not be obliged to update or correct any information set out in this document. This document is for the exclusive use of each person to whom it is addressed and their advisers, and is being supplied on a confidential basis solely and may not be reproduced or further distributed to any other person or publication in whole or in part for any purpose. The contents and information of this document and the document itself are proprietary of the Company and may not be relied upon by or disclosed to any third persons, companies, enterprises or institutions or used for any other purpose than in connection with the considering of the proposed Deal. The issue of this document shall not be taken as any form of commitment on the part of the Company and it reserves the right without advance notice, not to accept any proposal, nor to proceed with any transaction and to terminate communications, conversations, or negotiations at any time prior to the signing of any other document or agreement, without liability to any selected potential interested party or third party for any costs incurred in submitting a proposal or otherwise. The information set out in this document will not form the basis of any contract. In the case of a negotiation taking place, the successful interested party will be required to acknowledge in an agreement that it has not relied on or been induced to enter into such agreement by any representation or warranty, save expressly set out in such agreement. This document is governed by and construed in accordance with Ugandan Law.

Investment Opportunity – Hotel and Leisure Industry Information Teaser

INVESTMENT OPPORTUNITY IN THE HOTEL AND LEISURE INDUSTRY – INFORMATION TEASER

COMPANY OVERVIEW

The Hotel Property is one of the newly established hotels in Makerere, a Kampala suburb neighbouring Uganda’s oldest and largest University. The Hotel possesses 28 Rooms, a 40 seater conference hall, a dining room, bar and restaurant which offers the best hospitality in the neighbourhood under serene and conducive environment. the Hotel has secure parking which is manned 24 hours a day – [Photographs included in this teaser]

The hotel is strategically located in Kikoni a few meters from Makerere University, 2 minutes off-sir Apollo Kagwa road and within proximity of Kampala’s Central Business District (CBD)

It has a conducive space for conferences, meetings, business and accommodation. Its packages range from UGX 65,000 ($25) per night for single rooms, deluxe double at UGX 85,000 ($35) and penthouse at UGX 200,000 ($80) per night. The rooms are ensuite, complete with hot water, spacious balconies with beautiful views

Other services offered include international and local dishes, which are prepared to perfection by experienced chefs and cooks. The hotel also has a bar, which serves a variety of drinks

EXECUTIVE AND MANAGEMENT TEAM

Executive - Directors (2); Management – An experienced Hotel Manager (1) and Department

Supervisors (2) overseeing Rooms and Function Hire and Foods and Beverages respectively

BUSINESS MODEL & STRATEGY

Position the hotel as a budget to medium end hotel with a reputation for excellence in quality of service and customer satisfaction at affordable rates

Diversify revenue all year round from multiple sources: room accommodation; function room hire; foods and beverages. Capitalise on proximity to University to provide accommodation for visiting academics to university, business functions and events at the university.

Target 60-70% occupancy rate for both accommodation and function room hire; target at least 70% cost ratio for foods and beverages section. Aggressive marketing for upside on occupancy rate (up to 80%) and revenues from foods and beverages

Continue to improve on revenue streams and operational efficiency through financial control and IT systems

Ensure revenue from function room hire, foods and beverages at least cover operational expenses with net income from rooms as profit for the business - target of UGX 35 million ($15,000) net from rooms per month.

INVESTMENT OPPORTUNITY

At worst freehold land, approximately 1 acre, in a prime location in Kampala

Hotel as a going concern – prime and strategic location; income streams from accommodation, banqueting, bar and restaurant. Opportunity to build a brand in the hotel and leisure sector

Options for change of property use if desired with minimal additional costs – executive and serviced accommodation; student accommodation; office space

FINANCIAL OVERVIEW

Based on the current use as a hotel, the property is able to drive the following:

Turnover per month – at least UGX 50 million ($20,000) per month

Net income per month – estimated at UGX 35 million ($15,000) per month

TRANSACTION

Asking price of $2,000,000 (negotiable); Payment terms to be agreed

Investment Opportunity – Hotel and Leisure Industry Information Teaser

Photograph 1 - EXTERIOR VIEW OF THE HOTEL- MAKERERE

Photograph 2 - INTERIOR VIEW OF SHERON HOTEL –MAKERERE

Investment Opportunity – Hotel and Leisure Industry Information Teaser

Photograph 3 - GARDENS AND PARKING LOT OF THE HOTEL-MAKERERE