African Sun Limited eyes VFEX delisting

LIVINGSTONE MARUFU

Hospitality group, African Sun Limited (ASL), is planning to delist from the Victoria Falls Stock Exchange (VFEX), aiming to enhance operational flexibility and unlock shareholder value through a far-reaching portfolio restructuring as the country’s tourism sector undergoes profound change.

The proposed exit from the US-dollar-denominated bourse will be accompanied by a share buy-back programme, subject to regulatory approval, following a series of disposals of non-core assets designed to concentrate capital on higher-return properties.

The move underscores mounting pressure within Zimbabwe’s hospitality industry, where operators are grappling with shifting travel patterns, rising costs and intensifying competition from smaller, experience-driven establishments.

This has caused local expensive tourism and hospitality to be one of the most expensive in the continent.

A researcher with Morgan & Co, Tafara Mtutu, said the difficult operating environment has pushed the group into a decisive strategic rethink.

“The tourism industry in Zimbabwe has seen an influx of new players offering different experiences. Most of these have been boutique hotels, chalets, or lodges as opposed to large hotels. I believe these have affected traffic into some of these traditional hoteliers. Further, the continued decline in development partners’ support has extended to MICE activity in the country. All this spells challenges for the industry, and focusing on assets that continue to break even and hold long-term potential though continued capex – as ASL is doing – becomes a very apt strategy for survival,” Mtutu said.

The proposed delisting will be accompanied by an offer by the company to repurchase a portion of its issued ordinary shares from shareholders, subject to obtaining the requisite regulatory approvals and shareholder consents.

It is expected that the transaction will align with the board’s ongoing strategic review and value-unlocking initiatives, aimed at enhancing operational flexibility and supporting the company’s long-term strategic objectives.

Analysts say the retreat from the exchange reflects broader structural challenges affecting listed companies in Zimbabwe, where thin capital markets and compliance costs have reduced the attractiveness of remaining public.

Investment analyst Enock Rukarwa said the company is struggling to adjust to the complex and dynamic environment.

“… the reasons that have pushed most companies away from this platform, whether you are talking of ZSE or VFEX, are issues to do with sustaining the listing costs, issues to do with the regulatory compliance pressure. You would realise that if you are a listed entity, your regulation oversight thereof is a bit elevated as compared to someone who is operating in the private space. So, these are some of the reasons that have been sort of driving delistings within our space,” Rukarwa said.

“However, we will wait to see the full circular to shareholders detailing reasons thereof that have made African Sun decide this grandstanding move.”

He added that limited capital-raising activity on local exchanges has weakened the traditional rationale for maintaining a listing.

“When you look at our capital markets a thing that you would pinpoint is that capital raising on this platform has not been cordial on both ZSE and VFEX,” Rukarwa said.

ASL has already begun reshaping its portfolio. The group sold Monomotapa Hotel for around US$20m to raise capital earmarked for the strategic refurbishment and enhancement of flagship properties including Elephant Hills Resort and The Victoria Falls Hotel.

ASL will shut down the iconic Elephant Hills  in November this year to pave way for an 18-month refurbishment and rebranding programme. The revamped property will be reopened in the second quarter of 2028.

The restructuring marks a deliberate transition toward a smaller but higher-quality portfolio, allowing the group to sharpen operational focus while targeting improved margins and long-term profitability.

Rukarwa defended the refurbishment-led strategy, arguing that reinvesting in core hospitality assets represents a necessary recalibration rather than retrenchment.

“You would note that African Sun is a hospitality company and their core business is hospitality however they have been owning a lot of properties and it came to the realisation of the board of directors that it was prudent for the company to dispose off assets and channel the proceeds and revamping and improve the core revenue baskets that is the hospitality.

The reason why African Sun has been disposing of it has to revamp, improve and to face lift product which is the anchor revenue line for the business,” he stated.

“So in terms of survival in the short to medium barring the delisting the company should be able to comfortably and sustainably operate in the short to medium term.”

The planned delisting highlights a broader transformation within Zimbabwe’s tourism economy, where legacy hotel groups are recalibrating against agile boutique operators and constrained international funding flows.