Zimbabwe’s famous five-star hotel, the Meikles Hotel, is finally set to change hands after the current owner Meikles Limited last week received approval from the Reserve Bank of Zimbabwe (RBZ)’s exchange division to carry out the dispose of its flagship hotel to a foreign investor, Ali Albwardy through one of his investment vehicles, Business Times can report.
The Dubai-based tycoon, will pay US$20m for the acquisition of Miekles Hotel through Albwardy Investments, founded by the Dubai billionaire, who is also chairman of the enterprise.
The approval, was disclosed by the Zimbabwe Stock Exchange conglomerate, Meikles’ company secretary, Thabani Mpofu in a notice to shareholders will now pave way for Meikles Hotel’s disposal to the to Dubai-based tycoon.
This comes after the company received shareholders’ nod, regulatory approvals from the ZSE and the Competition and Tariff Commission last year for the deal to go ahead.
Now, the way has been cleared after it received the approval by the central bank’s Exchange Control division, which oversees the administration of Exchange Control regulations under the powers conferred to the RBZ by the President under Section 2 of Exchange Control Act.
The exchange control system regulates the inward and outward flow of money in Zimbabwe and it affect both individuals and companies.
This meant both Meikles and Dubai-based firm needed to ensure they comply with regulations that control the sending and receiving funds across Zimbabwe borders.
This now paves way to undertake the transaction.
“The directors wish to advice shareholders that approval from the Exchange Control Authorities has now been received for the Meikles Hotel disposal. Processes to consummate the transaction are underway,” Mpofu said.
The RBZ approval comes after Meikles Limited shareholders two months ago overwhelmingly approved the acquisition of the hotel by Dubai billionaire.
More than 70% of shareholders of Meikles Limited backed the resolution relating to the sale of Meikles Hotel to Albwardy Investments, a Dubai-based entity, at an extraordinary general meeting (EGM) in the capital recently.
The acquisition of the Zimbabwe Stock Exchange (ZSE) listed conglomerate Meikles Limited’s flagship hotel is expected to trigger a return of value to Meikles Limited shareholders.
Meikles Limited also have a secondary listing on the London Stock Exchange.
The current owner of the hotel, Meikles Limited, has over the past few years battled low occupancy levels and foreign currency shortages to refurbish the property. Now, it is expected that Albwardy, will spend at most US$30 million in upgrading the hotel,which has 312 rooms.
Meikles Limited, which started operating in Zimbabwe, then Rhodesia in 1892, has interests in the retail business through the TM-Pick’n Pay supermarket chain, a tea-manufacturing entity, Tanganda Tea Company and also runs hotel businesses, the Meikles Hotel, the Victoria Falls Hotel in the resort town of Victoria Falls in a joint venture arrangement with African Sun Limited, among others.
Meikles also owns a mining unit called Meikles Centar Mining.
It therefore appears to fit perfectly into Albward’s strategy for Albwardy Investments, which is also involved in the hospitality, food, trade, insurance and lifestyle business, among others.
The sale of Meikles Hotel is set to strengthen Meikles’ balance sheet as this will allow the Group to unlock considerable value to all of Meikles’ shareholders while also leading to the transformation of the Meikles Hotel, under the ultimate ownership of Albwardy Investment, into a leading regional hotel.
Meikles will also seek to generate further value in its remaining assets through the re-investment of the proceeds from the transaction in the agriculture and hospitality segments of the Group’s other businesses.