Dubai-based Albwardy Investments will soon take ownership of the iconic Meikles Hotel for US$20 million but the deal is subject to shareholder approval at Meikles Limited group’s EGM in December this year.
The transaction which qualifies as a Category 1 classification will see Dubai-based Billionaire acquiring Meikles Limited’s flagship hotel Meikles Hotel.
Established in 1915, the Meikles Hotel, which has a rich history, is the largest five-star hotel in Central Harare, Zimbabwe, with 312 guest bedrooms, two restaurants and high-quality leisure facilities.
The Meikles Hotel has over the past two decades been impacted by relatively low occupancy rates and a subsequent lack of investment in refurbishment and back of house services.
In order for the Hotel to compete with other leading hotels in southern Africa, foreign currency denominated long term capital, the scale of which cannot be provided by Meikles is needed.
The investment will finance the modernisation of the whole operation, as well as general infrastructure improvements, which will restore it to international Five-Star standards.
Commenting on the transaction, Meikles Limited executive chairman John Moxon stated that, “The acquisition of the iconic Meikles Hotel by Albwardy Investment is a win-win for all stakeholders. The Group’s financial position is further strengthened and allows Meikles to invest in its broader business portfolio, whilst the entrance of a leading global hotel and hospitality group of the calibre of Albwardy Investment provides security and long-term sustainability for Zimbabwe as a growing regional hub for tourism and business.”
Albwardy Investment director Laurie Ward added that, “Meikles Hotel provides a unique opportunity to invest in Zimbabwe’s leisure and business markets as a first mover. The refurbishment of this strategic asset will bring much needed investment into Harare and profile both the city and country on the international stage.”
The disposal of the Meikles Hotel is set to increase the group’s profitability, due to lower debt funding requirements from the continual capital expenditure to fund the ongoing refurbishment and upgrade of the Meikles Hotel.
The sale will also culminate in a strengthened Meikles’ balance sheet that will allow the Group to unlock considerable value to all of Meikles’ shareholders while also leading to the transformation of the Meikles Hotel, under the ultimate ownership of Albwardy Investment, into a leading regional hotel.
This will secure the long-term viability of the Hotel and its associated businesses, as well dramatically enhancing and improving Harare’s Central Business District;
Following the sale of Meikles Hotel, Meikles Limited will seek to generate further value in its remaining assets through the re-investment of the proceeds from the Transaction in the agriculture and hospitality segments of the Group’s other businesses.
The Transaction has received regulatory approvals from the Zimbabwe Stock Exchange and the Competition and Tariff Commission with only Shareholder and exchange Control approvals required to complete the transaction, both of which will be achieved soon after the completion of the General Meeting to be held at 10.30 am, Friday 13th December 2019.