ZIMBABWE’S largest leisure chain says it is to exit non-core operations and deploy revenues from the disposals into sprucing up its hotels.
The Zimbabwe Stock Exchange-listed African Sun Limited (ASL) operates a string of top end hotels in cities and resorts across Zimbabwe.
However, ASL also has interests in a number of non-core operations, such as Dawn Properties Limited (DPL), the leading real estate market player.
DPL was taken over by ASL last year.
This week, the hospitality giant was making fresh efforts to assume full control of the property operation, even as financial statements for the year ended December 31, 2021 revealed its plan to whittle down focus.
ASL announced top management changes at the end of last year.
Long-serving managing director Edwin Shangwa left the group after working his way to the top in a period spanning over two decades.
The group drafted Peter Saungweme, former chief executive officer at ASL’s parent Arden Capital, to take charge as it charts a new course in the post-pandemic era.
It was not clear if the surprise reshuffle triggered divestitures out of non-core assets.
But in DPL’s case, it contributed 12% to ASL revenue during the review period.
“We continue to be optimistic about the future of the group and are confident that our business model and strategy will put us in a strong position to succeed,” ASL said as it shared annual results with investors.
“Among other things, key to our success will be managing costs, disposal of non-core assets and deploying proceeds from the same to refurbish our hotels.
“The outlook remains highly uncertain and will largely depend on the pandemic’s evolution, the rate of vaccination and the effects of the geopolitical tensions in Eastern Europe,” it said in reference to a two-month old war pitting Russia and Ukraine.
The group lifted inflation adjusted revenue to ZW$4,3 billion (about US$27 million) during the review period, from ZW$2,9 billion (about US$18,2 million) during the same period in 2020.
The group bounded back to profit during the period after reporting a loss in 2020.
The group saw its occupancy levels rise to 31% after ending at 23% at the peak of pandemic-induced hard lockdowns in 2020, as governments responded to a terrifying surge in infections and deaths.
Pandemic curbs ended with a complete dislocation of the global aviation system, which powers international tourism, as edgy airlines sent staff home and grounded planes to avoid deadly contagion.
ASL’s revenue per average room tracked steeper demand, rising to ZW$3 408 (about US$21) during the review period, compared to ZW$2 905 (about US$18) during the comparable period in 2020.
The 2021 report came as the firm moved on Friday last week to crush pockets of resistance by DPL minorities who had turned down overtures to surrender their stocks to ASL.
DPL minorities holding a combined 5,22% stake in the business have clung to their fortunes in a yearlong battle to keep ASL at bay.
This followed its offer last year to buy them out and take full control of the business whose properties house most of its hotels.
Now, armed with the Companies and Other Business Entities Act (COBE), ASL has been granted the green light to flex its muscle, the firm said in a ZSE filing Friday.
Cornered DPL minorities were due to be pushed out yesterday unless they spring a dramatic surprise, on the same terms that they turned down the offer in early 2021.
The ZSE filing said “DPL shareholders representing 94,78% of the DPL issued ordinary shares accepted the original offer and surrendered their shares to ASL” and the remaining minorities would be “squeezed” out.
“Holders of the remaining shares are hereby notified that ASL obtained a court order in terms of Section 238(2) of the Companies and Other Business Entities Act [Chapter 24:31] under case number 1657/21 from the Magistrates Court in Harare on 14 March 2022, ASL said.
“The effect of the court order is that ASL is entitled and bound to acquire all such remaining shares on the same terms that applied to the shares whose holders accepted the original offer.
“In terms of Section 238 (2) of COBE and empowered by the court order, ASL hereby notifies the holders of the remaining shares that it shall acquire all the remaining shares, as it is entitled and bound to do so, with effect from 28 April 2022, on the same terms that applied to the shares whose holders accepted the original offer,” ASL added.