By Alois Vinga
LISTED diversified group, Meikles Limited has finalised the disposal of Cape Grace Hotel in a development which will enable the redeployment of capital to more profitable portfolios.
The hotel was sold to Eagle Owl JNP, a company registered in Mauritius and owned by Kasada Hospitality Fund LP, an affiliate of Kasada GP Limited.
Meikles Limited was a shareholder in Mentor Africa through Cape Grace Investments (CGI) where Mentor owns hotel assets collectively known as the Cape Grace Hotel located in Cape Town, South Africa.
In a notice to shareholders , Meikles said part of the transaction’s rationale was that the Cape Grace Hotel requires a multi-million-dollar refurbishment to maintain its position as one of the top high-end hotels almost fourteen years since the last major refurbishment.
“In view of the returns achieved from the investment since inception, the decision to exit has been in the best interest of Meikles’ shareholders. The sale provides an opportunity to redeploy the capital to sectors with higher prospects of returns.
“The Directors are evaluating options on reinvesting the sale proceeds. An announcement in this regard will be made once the evaluation is complete. The sale proceeds are ring fenced until such time shareholders have been advised of their intended use,” the notice said.
The terms of the transaction are that Eagle Owl has acquired 100% of the Sale Shares which comprise primarily the hotel assets and operation collectively known as the Cape Grace Hotel.
“The offer to purchase the Sale Shares constituted one indivisible transaction, and was accepted by both shareholders of Mentor. The sale price received for the CGI Mentor Share amounted to US$19,079,614 . CGI’s full sale proceeds were received before 31 March 2022,” said the notice.
The financial effect of the transaction is to increase the net assets of CGI and the Group by US$14,6 million.