African Sun migration to VFEX to bring significant benefits to shareholders
HOSPITALITY group African Sun Limited says migrating to the Victoria Falls Stock
Exchange (VFEX) will expose the group to US dollar equity and debt capital to finance its
hotel renovation and expansion projects.
The group has indicated one of its focus areas is enhancing guest experience and
consolidating its market share. African Sun is the largest hospitality company in
Zimbabwe that operates 10 hotels, including internationally recognised brands.
In 2021, the firm merged with Dawn Properties Limited in order to, among other
strategic reasons, create a sound balance sheet that supports the company’s ability to
raise capital to fund various hotel refurbishments and expansion projects.
The group has been given a nod by the Zimbabwe Stock Exchange (ZSE) to delist its
shares from the bourse in preparation for migration to VFEX.
Based on the proposed timelines, an extraordinary general meeting is set for March 28
with last day of trading African Sun Shares planned for March 31. Termination of African
Sun at ZSE listing and estimated completion of VFEX listing are set for April 6 and 14
respectively.
In a circular to shareholders board chairperson on Tuesday, Dr Emmanuel Fundira said
migration to the VFEX will enhance the ability of African Sun to raise USD capital
including foreign currency debt.
“The African Sun Board believes that migrating the company’s listing to the VFEX will
bring significant benefits to both current and potential shareholders,” he said.
Victoria Falls Stock Exchange
“Generally, listing on the VFEX will allow African Sun to gain access to a favourable
exchange control regime that appeals to international investors. This regime is designed
to make it easy for them to trade shares listed on the VFEX and repatriate both their
capital and dividend earnings in USD.
“This feature is crucial for offshore investors who are looking to make long-term
investments, as it addresses a key concern regarding the current ZSE listing.
“Furthermore by migrating to the VFEX, African Sun will have access to a source of
capital that is more aligned with its developmental needs than what is currently available
through its ZSE listing.”
African Sun and its subsidiaries is a hospitality group involved in running hotels, resorts,
and timeshare operations in Zimbabwe. The group is organised into five divisions — City
and Country Hotels, Resort Hotels, The Victoria Falls Hotel Partnership, Sun Leisure and
Real Estate.
Victoria Falls Hotel
Its hospitality portfolio includes The Victoria Falls Hotel (operated in partnership with
Meikles Hospitality (Private) Limited), Elephant Hills Resort and Conference Centre,
Caribbea Bay Resort, Great Zimbabwe Hotel, Hwange Safari Lodge, Holiday Inn Harare,
Holiday Inn Bulawayo, Holiday Inn Mutare, Troutbeck Resort, Monomotapa Hotel, and
Sun Leisure Tours.
The pending listing is a further indication of growing confidence in VFEX, which has
manifested through several new listings.
Innscor Africa Limited
The bourse has experienced rapid growth in recent months and managed to attract
migrations.
This year, Innscor Africa Limited and Axia Corporation Limited have already listed.
However, Seed Co Limited has since reversed its decision to list and opted to remain on
ZSE.
VFEX, launched in October 2020 is a subsidiary of the ZSE established to kick start the
Offshore Financial Services Centre (OFSC) earmarked for the special economic zone in
Victoria Falls.
The US dollar-denominated stock exchange has been offering various incentives that includeGovernment’s increase in the retention ratio for exporters listed on the VFEX to
100 percent, which has been an attractive factor for companies.
Listing on the VFEX also facilitates raising of US dollar capital, which enhances the
potential for organic growth and inorganically.-The Chronicle
