Hotel group, African Sun Limited (AfSun), is selling Great Zimbabwe Hotel and associated hotel business, located in Masvingo, for US$4,2 million to the Mewame Family Trust, as part of capital-raising initiatives to refurbish several other hotel properties it owns.
AfSun, in an announcement to shareholders, said it has enjoyed a considerable turnaround in fortunes over the past four years post the Covid-19 pandemic, with several changes at the executive level over the same period.
"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, including The Great Zimbabwe Hotel, which has been a marginal contributor to the profitability of the group over the review period," it said.
The company said the Mewame Family Trust approached AfSun and opened negotiations for the outright purchase of the business and assets relating to The Great Zimbabwe Hotel, culminating in an agreement of sale being executed on January 28, 2025.
Terms of the transaction are that Mewame Family Trust offered to purchase Great Zimbabwe Hotel, being 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$3,2 million.
It also offered to purchase the hotel business and associated hotel assets housed at Great Zimbabwe Hotel for a consideration of US$1 million as a going concern.
African Sun said the material conditions precedent for the transaction relate to payment of the full consideration within the agreed periods, completion of a due diligence exercise and in the event required by the purchaser, Exchange Control approval and approval from the Competition and Tariff Commission by April 1, 2025.
"The purchaser shall pay the purchase price in full into African Sun's nominated account on or before the agreed payment dates. The effective date of the transactions contemplated is 01 April 2025."
The Mewame Family Trust is a player in Zimbabwe's tourism and property development sectors, headquartered in Harare, and is seeking to bolster its tourism portfolio.
"To achieve this goal, the Trust has set its sights on acquiring Great Zimbabwe Hotel, with plans to enhance and expand its existing tourism assets," reads part of the notice.
AfSun is a leading hotel asset management firm listed on the Victoria Falls Stock Exchange (VFEX).
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AfSun manages 10 hotels strategically located throughout Zimbabwe.
The group owns seven properties namely Holiday Inn Mutare, Monomotapa Hotel, Troutbeck Resort, Elephant Hills Resort and Conference Centre, Hwange Safari Lodge, Great Zimbabwe Hotel and Caribbea Bay Resort).
It also leases three properties; Holiday Inn Harare, Holiday Inn Bulawayo and The Victoria Falls Hotel.
According to a trading update for the quarter ended September 30, 2024, revenue at US$18,1 million, was 24 percent ahead of the same period last year, while year-to-date revenue at US$43,7 million grew by 18 percent, largely driven by higher occupancy rates, firmer average daily rate (ADR), increased sales in food and beverages, and growing revenue contribution from the real estate segment.
The company said the domestic market remains the business anchor, contributing 71 percent of room nights sold, while the share from international arrivals has risen to 29 percent from 26 percent.
Occupancy levels improved by 7 percentage points compared to the previous year, primarily driven by higher demand for Meetings, Incentives, Conferences and Events (MICE) in resort and city hotels.
