Chiganze pushed off African Sun board

Chiganze was pushed off the board of the leading hotel group after members did not re-elect him at a board meeting held on Tuesday.

He was replaced by Themba Nkomo as chairman.

After every 12 months board members have to re-elect the chairman. African Sun CEO Shingi Munyeza said the directors had voted for new leadership.
Chiganze came under fire earlier this year for the way he handled the African Sun annual general meeting where he moved a motion to elect directors by way of poll, a move that some shareholders disagreed with.

He had been chairman of African Sun since 2009. Chiganze declined to comment when contacted by businessdigest.

On operational issues, the lease on Kingdom Hotel expired end of last year, but was still valid, Munyeza said. The group was currently in negotiations with the landlords –– Barclays Bank and Barclays Pension Fund. Indications are that the hotel would be sold and African Sun would have the right of first refusal.

Munyeza said his group was looking at buying the property.

Dawn Properties applied to the High Court for the cancellation of lease agreements for hotel properties, which are currently leased to the group.  Dawn Properties have lease agreements over eight hotel premises with the hotelier. The properties are Hwange Safari Lodge in Hwange, Holiday Inn Mutare, Carribea Bay Sun in Kariba, Elephant Hills Hotel in Victoria Falls, Crowne Plaza Monomotapa Hotel in Harare, Express Holiday Inn in Beitbridge and Troutbeck Hotel in Nyanga.

But Munyeza said negotiations were ongoing with Dawn over the lease of the eight hotel properties.

Seven of the properties had been agreed on while negotiations on one, Elephant Hills, were ongoing, he said.

He maintained that the leases were valid till 2053 and their 10-year tenure, which had an automatic renewal, would end next year.

Munyeza said the question would be how to unlock value from the properties. He said  refurbishments were ongoing.

The refurbishments were in two phases; the first phase consisted of six hotels together with three of the City Hotels, plus the three resort hotels in Victoria Falls.

The second phase of the refurbishment will consist of the remaining hotels and this would commence with the completion of the first phase.

In the year to March, the group posted a profit for the first time since dollarisation of US$1,3 million from a loss position of US$1,1 million.

The group said there had been a turnaround in the results due to the closure of the loss-making hotels and shedding of non-core operations.

Munyeza also noted there had been a recovery in the hotels in Victoria Falls. Victoria Falls led the revenue per room (RevPar) performance in the period at US$79, a 46% growth on the comparable year ago period. Hwange Safari Lodge was at the bottom of the pile with US$13 from US$9 last year.

Net debt increased 37% to US$11,58 million following the second draw-down of US$3,72 million against the long term Afreximbank facility.  –– Staff Writer.

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