HARARE - African Sun Limited (ASL)’s shareholders have approved the disposal of the hotelier’s 16,54 percent stake in listed property firm, Dawn Properties (Dawn).
The shareholding will be acquired by Lengrah Investments Private Limited, a subsidiary of private equity group Brainworks Capital (Brainworks), which is in turn a major shareholder in ASL.
“The sale agreement will result in ASL disposing of $4,6 million Dawn linked units, constituting 16,54 percent of the total issued links for a cash consideration of $5,95,” said ASL chairperson, Bekhitemba Moyo.
He told a joint annual and extraordinary general meeting in the capital last Friday that net proceeds from the disposal will be channelled towards reduction of short-term debt.
“A further reduction of finance costs by $975 165 per annum going forward in addition to the $740 000 in saving costs per annum from the first disposal of 12 percent of the issued linked units in Dawn is expected from the transaction,” Moyo added.
This comes as the Zimbabwe Stock Exchange had blocked the transaction over breach of listing rules.
The bourse’s chief executive, Alban Chirume, argued that ASL was supposed to initially seek ZSE’s approval before tabling it to its shareholders.
He said in terms of Section 9 of the local bourse’s listings rules, the proposed transaction is a Category 1 transaction which requires shareholders’ approval.
“To maintain the integrity of the market, the ZSE listings rules demand that all Category 1 transactions and notices by the issuers must be approved by the ZSE before publication,” Chirume said, adding the ZSE directed ASL retract the proposed transaction “until the approvals have been obtained”.
Meanwhile, in a trading update, ASL’s chief executive Shingi Munyeza said the group realised an eight percent increase in foreign arrivals compared to previous year.
This, he said, is in line with a five percent hike in the global tourism for the year 2013.
ASL realised a loss after tax of $6,57 million down from a profit of one million last year, attributed to exceptional charges.
“The charges are $3,21 million fair value loss on the 12 percent investment in Dawn held for sale as at the reporting date and $4,42 million impairment on the remaining 16,5 percent investment in Dawn,” the ASL boss said.
Munyeza also told shareholders that revenue for the five months to February 2014 was four percent down on the previous year due to lower occupancies.