Dawn in $18m hotels disposal

Published: 06 May 2014

Listed properties firm Dawn plans to dispose three of its hotels for a total $18,5 million.

The hotels up for sale are Beitbridge Express (BE), three-star Great Zimbabwe Hotel (GZH) and Hwange Safari Lodge (HSL).

According to documents, Mauritius-based BTI International (BTI) is the advisor to the transactions, under which Legacy Hotels and Resorts Limited (Legacy) seeks to purchase HSL, while One and Only Hotel Group (OOHG) has expressed interest in Beitbridge-based operation.

It is yet to identify a buyer for GZH.

The three assets are owned by Dawn, but managed by Zimbabwe Stock Exchange (ZSE)-listed hotelier African Sun Limited (ASL) under lease.

Other properties owned by Dawn and leased to ASL include Harare CBD-based Crowne Plaza Monomotapa Hotel (Crowne Plaza), Elephant Hills Resort and Conference Centre in Victoria Falls, Troutbeck Inn in Mutare and the Caribbea Bay Hotel in Kariba.

The disposals come on the back of ASL's shareholder approval to dispose its remaining 16, 54 percent in Dawn.

Dawn, initially ASL's subsidiary, was de-merged from the group in 2003 to create a stand-alone properties unit.

Under the transaction terms, Legacy proposes to pay $4,1 million to Dawn and $1,7 million to ASL in respect of the lease for the 100-roomed HSL, located in the heart of Hwange National Park, North west Zimbabwe.

In 2013, HSL's revenue stood at $1, 49 million, up from $1, 43 million recorded prior year while occupancy was down to 21 percent from 25 percent.

Average revenue per available room stood unchanged at $16.

For the 104-roomed BE - equidistant from Harare and Johannesburg-OOHG will pay $2,5 million to ASL and $6,7 million to Dawn respectively.

"For ASL, the transaction is more than 10 percent but less than 20 percent of its market capitalisation and therefore falls into category two of the ZSE listing requirements," BTI said.

The advisory firm valued ASL's GZH lease at $1,3 million and $2 million for the property.

Meanwhile, Dawn has advised its shareholders that negotiations are still underway.

It said if successfully completed, the transactions "may have a material impact on the value of the company's shares".

Dawn reported a $2,8 million turnover in the half year to November 2013.

Operating profit went up 185 percent to $874,791.

The closing carrying amount of investment property stood at $84,423,000.

Cash and cash equivalents for the group increased to $1,838,102 million from $832,011 while the hotel portfolio achieved a three percent increase in turnover to $1,321,014.

The group said this was mainly due to a growth of 23 percent in revenue per available room (rev par) at Elephant Hills Resort which hosted the UNWTO conference in August 2013 while that for Crowne Plaza grew by one percent.
- Business Live