Nelson Gahadza
Hotel group African Sun Limited (ASUN) is disposing of two of its hotels, the Great Zimbabwe Hotel, located in Masvingo, for US$4,445 million and the Beitbridge Express Hotel in Beitbridge for US$2,5 million all to TD Hotels & Leisure (Private) Limited.
The board resolved to sell the Great Zimbabwe Hotel on March 22, this year, while the agreement for the Beitbridge Express Hotel was executed on July 18, 2024.
The agreement for the Great Zimbabwe Hotel was agreed on August 15, 2024, with the effective date for the transactions set for November 1, 2024.
The company, in an announcement to shareholders, said it has enjoyed a considerable turnaround in fortunes over the past 3 years post-COVID-19 pandemic.
However, in order to expedite the refurbishment of several of the portfolio’s primary hotels, the Board deemed it necessary to complement capital-raising initiatives by selling selected assets deemed not to be core to AFSUN’s future, including the Beitbridge Express and The Great Zimbabwe hotels.
“Due to deteriorating trading conditions, the Beitbridge Express Hotel was mothballed in early 2016, while the Great Zimbabwe Hotel has been a marginal contributor to the profitability of the group over the review period,” reads the statement.
The terms of the transaction are that TD Hotels and Leisure offered to purchase Stand 583 Beitbridge Township measuring 7,8339 hectares held under Deed of Transfer No. 665/2010.
Subsequently, TD also offered to purchase the Great Zimbabwe Hotel, a certain piece of land known as Mundells Plot A, measuring 20.4272 hectares situated in the District of Victoria, held under title deed 1747/2010, for a gross consideration of US$3,5 million, and also offered to purchase the hotel business and associated hotel assets housed at the Great Zimbabwe Hotel for an additional consideration of US$945,000.
Afsun said the material conditions precedent to the transaction contemplated herein relate to payment of the full consideration within the agreed period and, in the event required by the purchaser, exchange control approval and approval from the Competition and Tariff Commission by 30 September 2024.
“The purchaser shall pay the purchase price for each transaction in full into ASUN’s nominated account no later than 45 days after the signing of the respective agreements of sale. The Effective Date of the Transactions contemplated above is 01 November 2024,” reads the statement.
In the quarter to March 31, 2024 group revenue at US$11,1 million was 40 percent ahead of the prior year, largely driven by higher demand for conferences during the quarter, resulting in an 8-percentage-point increase in occupancy and a firmer Average Daily Rate (“ADR”).
During Q1 2024 the domestic market continued to be the primary source of business, contributing 76 percent of the total room nights sold, while the international market is gradually recovering, contributing 24 percent of room nights, a 54 percent growth from the same period last year.
On profitability, the group recorded an EBITDA of US$0,26 million, an improvement from an EBITDA loss of US$0,41 million recorded in the same period last year.
Loss before tax was US$1,27 million from US$1,85 million in the comparable period, an improvement of 32 percent.
