- ASUN is selling the Great Zimbabwe Hotel for $4.4 million and Beitbridge Express Hotel for $2.5 million
- The decision aligns with ASUN’s strategy to focus on core assets and improve profitability
- Proceeds from the sales will be used for refurbishing and upgrading remaining hotels in the portfolio
Harare- Zimbabwe’s largest hotel group, African Sun Limited (ASUN) is disposing two of its hotels: the Great Zimbabwe Hotel, located in Masvingo, and the Beitbridge Express Hotel, situated in Beitbridge according to a circular released by the group.
The board resolved to sell the Great Zimbabwe Hotel on March 22, this year, while the agreement for the Beitbridge Express Hotel was executed on July 18, 2024.
The agreement for the Great Zimbabwe Hotel followed on August 15, 2024, with the effective date for the transactions set for November 1, 2024.
TD Hotels & Leisure will acquire the Beitbridge Express Hotel for $2.5 million, while the Great Zimbabwe Hotel will be sold for a total of US$4.4 million which includes both the property and associated hotel business assets.
Payment for these transactions is expected within 45 days after the signing of the respective agreements.
The rationale behind this decision stems from ASUN’s strategic review aimed at optimizing its asset portfolio. Over the past three years, ASUN has experienced a considerable turnaround following the challenges posed by the COVID-19 pandemic.
In this context, the company identified the necessity to focus on core assets, enabling the company to expedite capital-raising initiatives.
The Beitbridge Express Hotel has been non-operational since 2016, while the Great Zimbabwe Hotel has contributed marginally to the group’s profitability.
The upside of this disposal is significant for ASUN. By divesting from underperforming properties, the company can refocus its resources on core assets that align better with its growth strategy.
Following the closure of Kingdom Hotel, ASUN embarked on extensive refurbishment projects, including the renovation of 46 rooms at Hwange Safari Lodge and the improvement of public areas at Troutbeck.
This not only enhances operational efficiency but also positions ASUN to improve its profitability in the competitive hospitality sector.
The hotel reported a loss of US$360,000 in full-year 2023 following a US$1.8 million loss in HY23.
The capital raised from these sales will allow ASUN to invest in the refurbishment and upgrade of its remaining hotels. This investment is crucial for attracting both domestic and international tourists, particularly in the recovering post-pandemic travel landscape.
Therefore, ASUN's decision to sell the Great Zimbabwe and Beitbridge Express hotels marks a strategic step towards revitalizing its business and securing a stronger financial future as a leading hotel group in Zimbabwe.
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