By Fradreck Gorwe/Panashe Chikonyora
Meikles Hospitality’s disposal of its flagship hotel, Meikles Hotel, has now passed the approval stage as all regulatory approvals have been completed with processes underway to consummate the transaction.
The hotel is being sold for US$20 million to a Dubai-based Entity, Albwardy Investments and shall be run through the company’s Zimbabwean investment vehicle, ASB Hospitality.
The decision to dispose of the hotel emanated from Meikles Hospitality’s self-proclaimed incapacity to mobilise the US$30 million it inevitably needed for the substantial modernisation of guest facilities as well as electro-mechanical and plumbing to restore the hotel to international standards.
On November 22, 2019, the company issued a circular to shareholders highlighting the importance of putting the hotel in the hands of skilled international hotel operators with capacity to undertake the requisite refurbishments.
For the disposal to sail through, prior regulatory and shareholder approvals had to be attained which include a nod from the Competition and Tariff Commission (CTC), the Securities and Exchange Commission of Zimbabwe (SECZIM, which regulates the Zimbabwe Stock Exchange), and the Reserve Bank of Zimbabwe’s Exchange Control Authorities.
The CTC had long approved of the transaction in June 2019 followed by SEC. In fact, all prior regulatory and shareholder approvals had been received with only the Exchange Control Authorities’ approval pending before the December 13, 2019 Extraordinary General Meeting.
In a notice to shareholders released on Friday, the group indicated the Exchange Control Authorities have finally approved the transaction, effecting a haste in processes to conclude the disposal;
“Shareholders are referred to the resolutions of the Extraordinary General Meeting (EGM) held on 13 December 2019 and notice of the results of the EGM released on 19 December 2019.
“The directors wish to advise shareholders that approval from Exchange Control Authorities has now been received for the Meikles Hotel disposal. Processes to consummate the transaction are underway,” said company secretary Thabani Mpofu in the notice.
The two parties had already agreed on transaction terms part of which claim the acquiring ASB Hospitality shall for a period spanning five-years use the name Meikles Hotel, its associated logos as well as intellectual property relating to the hotel business.
Acquisition of Meikles Hotel by an internationally recognised hospitality entity, Albwardy Investments will help expand Zimbabwe’s reach in terms of tourism and hospitality markets and in the process propel exponential growth of the sector.
The disposal is in fact a sign that the Zimbabwean hospitality industry has opened doors for foreign direct investors given the deficit of new modern hotels.
Most players in the hospitality industry have lauded Meikles Limited’s decision as they claim the sale to be very important perceiving it as a sign of progression in the hospitality space. The Chronicle