African Sun seeks to ‘unlock value’ with additional strategic asset disposal
African Sun Limited has announced plans to dispose of additional hospitality assets, following its recent sale of two underperforming hotels, Great Zimbabwe Hotel and Beitbridge Express Hotel, for approximately US$7 million.
· Nehanda RadioThe company sold Great Zimbabwe Hotel for US$4.45 million and Beitbridge Express Hotel for US$2.5 million to TD Hotels, citing deteriorating trading conditions.
African Sun’s portfolio includes Monomotapa, Elephant Hills, Caribbea Bay, Hwange Safari Lodge, Holiday Inn, Troutbeck and The Victoria Falls Hotel which it co-runs with Meikles.
The proposed disposals constitute a “Category 1” transaction, requiring shareholder approval due to its significant size. An Extraordinary General Meeting (EGM) will be convened to obtain shareholder approval.
“Further to the announcement to Shareholders on 3 September 2024, the Directors of African Sun Limited (the ‘Board’ and the ‘Company’) wish to advise all Shareholders and the investing public that in keeping with its strategy of unlocking value, the Company has entered into negotiations for the disposal of additional hospitality assets,” the company noted.
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“The proposed disposals will constitute a ‘Category 1’ transaction, accordingly, the Company would be seeking the approval of its Shareholders at an Extraordinary General Meeting (“EGM”) to be convened at the appropriate time.
“Further details will be provided to Shareholders once all the negotiation processes have been concluded.”
Accordingly, the company has advised shareholders to exercise caution and consult their professional advisers when trading in the shares of African Sun Limited, citing that the transactions may have a material effect on the Company’s shares.
Interestingly, Meikles Limited, a leading Zimbabwean conglomerate with interests in retail and hospitality, is in the process of disposing of some of its assets.
Because the disposal also constitutes a ‘Category 1’ transaction, the Company will finalise the decision after consulting shareholders at an Extraordinary General Meeting, whose date is yet to be announced.