By Robert Tapfumaneyi
MEIKLES Limited Friday issued a circular to shareholders seeking approval for the disposal of the Harare Meikles Hotel to ASB Hospitality Zimbabwe, a group company of Albwardy Investment LLC of Dubai for US$20 million.
The disposal of the hotel will provide benefits to a broad range of stakeholders such as an increase in the group’s profitability due to lower debt funding requirements from the continual capital expenditure to fund the ongoing refurbishment and upgrade of the plush facility.
In a statement to shareholders, Meikles Group said this was to allow the hotel to compete with other leading hotels in Southern Africa.
“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,” said the group.
“A strengthened Meikles’ balance sheet that will allow the Group to unlock considerable value to all of Meikles’ shareholders, and the transformation of the Meikles Hotel, under the ultimate ownership of Albwardy Investment, into a leading regional hotel.”
The group added, “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.”
The hospitality company said the move was also to ensure the growth of the Meikles Hotel business to attract a far broader clientele of business and leisure customers as part of the Albwardy Investment business model.
Commenting on the Transaction, John Moxon, Executive Chairman of Meikles, said the acquisition of the iconic Meikles Hotel by Albwardy Investment was 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,” he said.
Laurie Ward, Director of Albwardy Investment’s hospitality portfolio, said 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.”
Established in 1915, the Meikles is the largest five-star hotel in Central Harare, Zimbabwe, with 312 guest bedrooms, two restaurants and high-quality leisure facilities.
The 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.