African Sun sells two hotels to recapitalise
Listed hospitality group, African Sun Limited, has sold Great Zimbabwe Hotel in Masvingo and Beitbridge Express Hotel for a combined US$6,9 million to TD Hotels and Leisure (Private) limited, an upcoming local hospitality concern.
African Sun, which is listed on the Victoria Falls Stock Exchange (VFEX), said the transactions were occasioned by the need to complement capital raising by selling selected assets considered not to be core to the group's future.
In an announcement to shareholders, the hospitality group said that over the past three years, after the Covid-19 pandemic, it has enjoyed a considerable turnaround in fortunes.
However, due to deteriorating trading conditions, the Beitbridge Express Hotel (BEH) was mothballed in early 2016 while the Great Zimbabwe Hotel (GZH) has been a marginal contributor to the profitability of the group over the review period.
"This announcement is neither a prospectus nor an invitation to the public to subscribe for shares in African Sun Limited, but is issued in compliance with the requirements of the VFEX, to give information to the public regarding the disposal of the GZH Hotel and associated hotel business, located in Masvingo, for a gross consideration of US$4,4 million and the disposal of the BEH, located in Beitbridge, for a gross consideration of $2,5 million -- all to TD Hotels & Leisure (Private) Limited," said the group in the latest trading update.
The decision to dispose of GZH was reached in March this year while the Beitbridge Express Hotel (BEH) has been held as an asset available for sale since September 2021.
Negotiations were entered into in respect of the Beitbridge Hotel and an agreement of Sale was executed on July 18 this year.
Subsequently, negotiations for the sale of the GZH were held with the same prospective buyer and an agreement of sale was executed last month.
In 2023, African Sun posted an operating profit of US$3,74 million.
However, the group recorded a marginal profit after tax from continuing operations of US$0,52 million.
African Sun is a renowned hotel asset management firm that trades on the VFEX and presently, the hospitality concern manages 10 hotels strategically located throughout Zimbabwe.
A Real Estate arm complements its core business.
Of the 10, the group owns seven properties which are: Holiday Inn Mutare, Monomotapa Hotel, Troutbeck Resort, Elephant Hills Resort and Conference Centre, Hwange Safari Lodge, GZH and Caribbea Bay Resort and leases three properties -- Holiday Inn Harare, Holiday Inn Bulawayo and The Victoria Falls Hotel.
