Meikles sale transaction to be finalised
The disposal of Meikles Hotel to ASB Hospitality (Zimbabwe) (Private) Limited is now nearing finalisation after Miekles Limited received an approval from Exchange Control Authorities to dispose of the hotel in foreign currency.
Transacting in foreign currency in domestic transactions was outlawed by Statutory Instrument (SI) 142 of 2019, hence the listed company sought for approval from Reserve Bank of Zimbabwe (RBZ) and further approval from Exchange Control Authorities to receive the proceeds of the disposals in a ring-fenced foreign currency account.
The Dubai-based ASB hospitality will soon take ownership of the iconic Hotel for US$20 million.
“Shareholders are referred to the resolutions of the Extraordinary General Meeting (EGM) held on December 13, 2019 and notice of the results of the EGM released on December 19, 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 Meikles Limited company secretary Thabani Mpofu.
Besides a nod from shareholders in December, the transaction had also received regulatory approvals from the Zimbabwe Stock Exchange (ZSE) and the Competition and Tariff Commission (CTC) with only exchange Control approvals required to complete the transaction.
Proposal to dispose the hotel emanated from the directors’ conclusion that the hotel had no capacity to mobilise US$30 million required for refurbishment for the hotel to retain its five-star rating and standards.
The investment, however, will finance its modernisation, as well as general infrastructure improvements, which will restore it to international standards.
Meanwhile, the Meikles group expects to increase profitability, due to lower debt funding requirements from the continual capital expenditure to fund the ongoing refurbishment and upgrade of the Meikles Hotel.