African Sun makes fresh bid for hotels
CLOUDINE MATOLA
African Sun Limited (ASL), a publicly traded hospitality group, has put up a fresh bid to dispose of two hotels, the Beitbridge Express Hotel and Great Zimbabwe Hotel in Masvingo, Business Times can report.
When the two hotels were first put up for sale recently, ASL signed a deal with TD Hotels and Leisure (Private) Limited, for the latter to purchase the two assets for a total of US$6.9m.
However, the agreement was terminated. ASL did not provide an explanation for why the contract was cancelled.
This week, ASL’s company secretary and governance executive Venon Musimbe confirmed that the Victoria Falls Stock Exchange listed hospitality group is actively seeking new bids.
He said: “Further to the cautionary statement dated 10 September 2024, shareholders and the investing public are advised that in keeping with the strategy of unlocking value, negotiations for the disposal of a selection of hospitality assets are ongoing.
“The negotiations, if successful, 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.
Therefore, shareholders and the investing public are advised to exercise caution when dealing with the company’s securities until advised of the conclusion of the ongoing process.”
In its financial results for the six months to June 30 2024, ASL widened its loss to US$2.17m due to non-recurring costs from US$1.81m reported in the prior comparative period.
Revenue for the period, however, grew by 14% to US$25.58m from US$22.36m reported in the same period last year. This was due to firmer average daily rates (ADR) which increased by 9% to US$112 from US$103 during the comparable period.
Hotel occupancy for ASL closed the half year at 50%, from 46% recorded the same period last year.
Earnings before interest, tax, depreciation, and amortization (EBITDA) increased by 2% to US$2.54m from US$2.48m in 2023 due to improved toppling performance.
The company maintained its strong liquidity position, with a cash and cash equivalents balance of US$10.56m at the end of the period under review, generating US$2.37m from operations during the period, a significant recovery from the US$1.13m utilised in the comparable period.