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A UNITED Arab Emirates-based company, Albwardy Investment, is finalising a purchase of one of Zimbabwe’s prestigious hotels, the Meikles Hotel in Harare, for US$20 million.

Meikles has over the past few years struggled with low occupancy levels and has lacked foreign exchange to refurbish the property, which is situated in the capital’s Central Business District. 

Albwardy said the investment has been approved by the Zimbabwe Stock Exchange and the Competition and Tariff Commission, while the shareholders would vote on the transaction next month, Reuters reported.

“The Meikles Hotel provides a unique opportunity to invest in Zimbabwe’s leisure and business markets as a first mover,” Albwardy director of hospitality, Laurie Ward said, in a statement.

The hotel was established in 1915 and has 312 rooms. In a circular to shareholders last week, Meikles Limited said the board assessed and is satisfied with ASB Hospitality Zimbabwe’s capacity to fulfil the terms of the proposed transactions. ASB Hospitality Zimbabwe is a special purpose vehicle of Albwardy Investments, which was recently incorporated in Zimbabwe.

“The board assessed and is satisfied with ASB Hospitality Zimbabwe’s capacity to fulfil the terms of the proposed transactions, including the US$20 million combined purchase price.

“It should also be noted that the previous carrying value of Meikles Hotel (US$26,7 million as at March 31, 2018) was higher than the subsequent independent property valuations undertaken in April 2019 and August 2019,” said Meikles Limited.

It said the principal rationale for the proposed transaction was that the group does not want foreign currency exposure related borrowings to fund the required refurbishment of the hotel to bring it to a five-star property by international standards.

Initial estimates indicate that up to US$30 million is required for the substantial modernisation of guest facilities as well as electro mechanical and plumbing to restore the hotel to international standards.

“Accordingly, the board believes that it is best for the future development of the hotel to be placed in the hands of skilled international hotel operators with the capacity to undertake the requisite refurbishment of the hotel,” said Meikles.

Proceeds from the disposal of the hotel will be ringfenced and earmarked for investments that enhance foreign currency generation capabilities of the group, in particular further investments in hospitality and agriculture sectors. — Reuters/Business Chronicle