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South Africa: Mvela to Take 26 Percent as Queensgate Lists

Julius Baumann

11 September 2008

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Johannesburg — HOTEL group Queensgate Hotel & Leisure is to debut on AltX tomorrow, with empowerment group Mvelaphanda Holdings taking 26% of the newly listed entity.

In February, Mvelaphanda took 50% of the leisure company's holding group, Queensgate Holding, in return for injecting R60m in the company.

Queensgate CE Andrew Hubbard said yesterday the company would place 1,2-billion shares at about 30c, with Mvelaphanda taking 26%, Queensgate and its management holding about 50%, and the remaining shares in free float.

The group owns and manages a diverse portfolio of properties including Tinga Lodge in the Kruger Park, the Ra disson Hotel in Cape Town, as well as its four-star properties Cape Town Hollow and the Hollow on the Square. The group also recently took control of the 300-year-old Alphen Hotel in Cape Town.

"We plan to refurbish the hotel to four- or five-star level, giving Queensgate a property on par with the luxurious Tinga in the Kruger Park," said Hubbard.

The group also owns the Amici and Butcher's Grill restaurant brands, as well the OneWellness spa chain. While there were six stand-alone Butcher's Grill and two Amici restaurants, Hubbard said the intention was to grow the chains within the group's hotel properties. OneWellness would be rolled within its own hotels. The first spa opened in the Radisson last year.

With most of the group's hotels in Cape Town, Hubbard was keen to see expansion beyond Western Cape and said the group was in negotiations to acquire further properties. "If I am to be bold, I would say that we will add another 1000 rooms by the end of next year."

The group planned to follow up its listing by issuing more shares later in the year.

Queensgate is keen to rekindle its relationship with Rezidor, owners of the Radisson and Park Inn brands. In 1999, Queensgate secured the franchise for Radisson hotels in SA but sold it to Mvelaphanda a year later, retaining its stake in the Cape Town Radisson. "We are in talks with Rezidor and hope to reunite with the group."

As the group was strongly focused on the Western Cape, Hubbard admitted the Cape Town low season affected the group's numbers. "However, in recent years it has only been really two to three months in winter that we struggle. For the rest of the year we do not have enough rooms."

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