African Sun’s asset disposal to unlock capital for strategic reinvestment
SAMANTHA MADE
Publicly traded hospitality group, African Sun Limited, says its decision to divest from certain assets is primarily aimed at raising capital to fund the strategic refurbishment and enhancement of key hotels in its portfolio.
The company stated that proceeds from the disposal of the Monomotapa Hotel and its adjacent car park will be reinvested into upgrading prominent properties, including Elephant Hills Resort, Holiday Inn hotels, and The Victoria Falls Hotel.
“The proposed disposal is primarily intended to unlock capital that will be reinvested in the refurbishment and enhancement of key strategic assets within African Sun’s portfolio, including the Elephant Hills Resort and Conference Centre, the next phase of the Victoria Falls Hotel and to make a start on the Holiday Inn properties,” the group said.
The hospitality firm emphasized that these refurbishments are part of a broader strategy to enhance the guest experience and maintain international hospitality standards.
“These upgrades are central to the company’s commitment to delivering exceptional guest experiences and maintaining internationally competitive hospitality standards,” the group stated.
African Sun also noted that the disposal would strengthen its financial position, boost liquidity, and support its strategic realignment.
“Proceeds from the disposal will significantly bolster African Sun’s liquidity, enabling the company to fund critical capital expenditure and share buy-back initiatives. This improved financial flexibility will reinforce the company’s balance sheet, support long-term sustainability, and enable continued investment in core business operations.”
The move forms part of African Sun’s shift toward a smaller, high-quality portfolio, allowing the group to sharpen its operational focus while improving profitability.
“The disposal of these assets supports the company’s shift to a smaller high-quality hotel portfolio with enhanced focus, enabling greater operational focus, scalability, and profitability,” the group revealed.
In addition to capital reallocation, the company cited market dynamics and historical performance as key factors influencing the decision to offload the Monomotapa Hotel.
“In light of prevailing market conditions and the historical performance of the Monomotapa Hotel, the disposal represents a prudent and forward-looking decision. The transaction will allow African Sun to reallocate resources to higher-performing assets and locations with stronger growth potential, thereby optimising the company’s asset portfolio and enhancing shareholder value.”
The Board of Directors approved the transaction three months ago through a round robin resolution, accepting an offer from the Public Service Commission to acquire the Monomotapa Hotel and adjacent car park for US$18 million plus any applicable VAT.
“The Board identified this transaction as a strategic opportunity in line with the company’s ongoing portfolio optimisation and capital reallocation strategy,” the group said.
African Sun confirmed that the disposal includes all hotel operations, buildings, and land, which will be transferred as a going concern. The deal will be settled through an outright sale, with the full proceeds to be deposited into an escrow account within 30 days of signing the transaction agreements.
Upon completion, the Monomotapa Hotel and car park will no longer form part of African Sun’s asset or operational portfolio.
The company says the move will bolster its asset base, enhance the overall quality of its properties, and position the group for sustained growth and competitiveness in the tourism sector.
