AfSun seeks US$51m for key assets, including share of Vic Falls Hotel contract
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BULAWAYO – As noted in previous market reports on FinX (https://mailchi.mp/0cd34a407c4a/zse-in-second-consecutive-loss-on-weak-heavyweights-1286076?e=08a3e9906b), African Sun has put up some of its key hotel assets up for sale, which includes the Monomotapa Hotel and the 50% share of the management contract at Vic Falls Hotel.
Meikles is already trading on a cautionary statement pending the sale of the 50% management contract after Albwardy, the new owner of the Harare Hyatt Regency (former Meikles), made an offer for the management contract to both hoteliers. This would mark the end of Meikles’ hospitality foray.
According to information obtained by FinX, the Monomotapa Hotel, a landmark establishment in the centre of Harare, is being offered at an asking price of US$20 million (roughly equivalent to the Meikles price).
Known for its unique crescent-shaped architecture and prime location, the hotel boasts 243 rooms, multiple dining options, and extensive conference facilities. With a history dating back to 1974, the Monomotapa Hotel has been a staple in Zimbabwe’s hospitality landscape, making it an attractive acquisition for those looking to capitalise on the country’s recovering tourism sector.
The 50% operating business of the Victoria Falls Hotel is on the market for US$22 million. This five-star hotel, part of the prestigious Leading Hotels of the World, is situated near one of the Seven Wonders of the World, the Victoria Falls. The hotel has a rich history and has been a luxury icon in Africa for over a century. The sale includes only the operating business, not the property itself, providing a unique opportunity for investors to engage with a well-established brand in a prime location. The National Railways of Zimbabwe are the property’s owners.
Additionally, the Caribbea Bay Resort, located in Kariba, is available for US$9 million.
The proceeds from the sale will most likely be deployed in other projects within the group, which include the development of land next to Elephant Hills.
African Sun has already signed purchase agreements for two other assets, Beitbridge Express and Great Zimbabwe Hotel.
Of the assets listed for sale, the 50% share of the Vic Falls Hotel Contract seems the most lucrative. It had an EBITDA of US$1.71 million for the 50% share in February 2024, with the margin at 31%. Estimated EBITDA for 50% share (February 2025) is US$2.07 million and for February 2026 is USD $2.36 million.
The hotel’s capital expenditure (capex) budget is set at US$1 million for the year ending February 2025, US$2 million for February 2026, US$3 million for February 2027, and US$3 million for February 2028. These expenditures will be financed through the regular operating cash flow of the partnership, assuming there are no changes in partners. This planned capex is intended solely to maintain the hotel in acceptable condition. However, to fully realise its potential during this period, an additional investment of US$20 million is anticipated.
-finx
