Oliver Kazunga
African Sun Limited, a publicly traded hospitality group, has finalized the sale of the Great Zimbabwe Hotel in Masvingo and the Beitbridge Express Hotel for a total of US$6.9 million to TD Hotels and Leisure (Private) Limited, a burgeoning local hospitality entity.
As a company listed on the Victoria Falls Stock Exchange (VFEX), African Sun indicated that these sales were part of a strategy to enhance capital by divesting from certain assets deemed non-essential to the group's future growth.
In a communication to its shareholders, the group noted a significant recovery in its business over the past three years following the challenges posed by the Covid-19 pandemic.
Nevertheless, the Beitbridge Express Hotel (BEH) has been closed since early 2016 due to worsening trading conditions, while the Great Zimbabwe Hotel (GZH) has only made a minimal contribution to the group's profitability during the review period.
"This announcement does not serve as a prospectus or an invitation for the public to purchase shares in African Sun Limited. It is issued in accordance with VFEX regulations to inform the public about the sale of the GZH Hotel and its associated operations in Masvingo for a total of US$4.4 million, along with the sale of the BEH in Beitbridge for US$2.5 million, both to TD Hotels & Leisure (Private) Limited," the group stated in its recent trading update.
The decision to sell the GZH was made in March of this year, while the Beitbridge Express Hotel (BEH) has been classified as an asset for sale since September 2021.
Negotiations regarding the Beitbridge Hotel commenced, culminating in the execution of a Sale Agreement on July 18 of this year.
Following this, discussions for the sale of the GZH were conducted with the same potential buyer, resulting in a Sale Agreement being finalized last month.
In 2023, African Sun reported an operating profit of US$3.74 million. Nevertheless, the group achieved a slight profit after tax from continuing operations amounting to US$0.52 million.
African Sun is a prominent hotel asset management company listed on the VFEX, currently overseeing 10 hotels strategically positioned across Zimbabwe. Its core business is supported by a Real Estate division.
Of the 10 hotels, the group owns seven, which include Holiday Inn Mutare, Monomotapa Hotel, Troutbeck Resort, Elephant Hills Resort and Conference Centre, Hwange Safari Lodge, GZH, and Caribbea Bay Resort, while leasing three properties: Holiday Inn Harare, Holiday Inn Bulawayo, and The Victoria Falls Hotel.