Chronicle Editor
Nqobile Bhebhe, Senior Business Reporter
HOSPITALITY group African Sun Limited says migrating to the Victoria Falls Stock Exchange (VFEX) will expose the group to US dollar equity and debt capital to finance its hotel renovation and expansion projects.
The group has indicated one of its focus areas is enhancing guest experience and consolidating its market share. African Sun is the largest hospitality company in Zimbabwe that operates 10 hotels, including internationally recognised brands.
In 2021, the firm merged with Dawn Properties Limited in order to, among other strategic reasons, create a sound balance sheet that supports the company’s ability to raise capital to fund various hotel refurbishments and expansion projects.
The group has been given a nod by the Zimbabwe Stock Exchange (ZSE) to delist its shares from the bourse in preparation for migration to VFEX.
Based on the proposed timelines, an extraordinary general meeting is set for March 28 with last day of trading African Sun Shares planned for March 31. Termination of African Sun at ZSE listing and estimated completion of VFEX listing are set for April 6 and 14 respectively.
In a circular to shareholders board chairperson on Tuesday, Dr Emmanuel Fundira said migration to the VFEX will enhance the ability of African Sun to raise USD capital including foreign currency debt.
“The African Sun Board believes that migrating the company’s listing to the VFEX will bring significant benefits to both current and potential shareholders,” he said.
“Generally, listing on the VFEX will allow African Sun to gain access to a favourable exchange control regime that appeals to international investors. This regime is designed to make it easy for them to trade shares listed on the VFEX and repatriate both their capital and dividend earnings in USD.
“This feature is crucial for offshore investors who are looking to make long-term investments, as it addresses a key concern regarding the current ZSE listing.
“Furthermore by migrating to the VFEX, African Sun will have access to a source of capital that is more aligned with its developmental needs than what is currently available through its ZSE listing.”
African Sun and its subsidiaries is a hospitality group involved in running hotels, resorts, and timeshare operations in Zimbabwe. The group is organised into five divisions — City and Country Hotels, Resort Hotels, The Victoria Falls Hotel Partnership, Sun Leisure and Real Estate.
Its hospitality portfolio includes The Victoria Falls Hotel (operated in partnership with Meikles Hospitality (Private) Limited), Elephant Hills Resort and Conference Centre, Caribbea Bay Resort, Great Zimbabwe Hotel, Hwange Safari Lodge, Holiday Inn Harare, Holiday Inn Bulawayo, Holiday Inn Mutare, Troutbeck Resort, Monomotapa Hotel, and Sun Leisure Tours.
The pending listing is a further indication of growing confidence in VFEX, which has manifested through several new listings.
The bourse has experienced rapid growth in recent months and managed to attract migrations.
This year, Innscor Africa Limited and Axia Corporation Limited have already listed. However, Seed Co Limited has since reversed its decision to list and opted to remain on ZSE.
VFEX, launched in October 2020 is a subsidiary of the ZSE established to kick start the Offshore Financial Services Centre (OFSC) earmarked for the special economic zone in Victoria Falls.
The US dollar-denominated stock exchange has been offering various incentives that include Government’s increase in the retention ratio for exporters listed on the VFEX to 100 percent, which has been an attractive factor for companies.
Listing on the VFEX also facilitates raising of US dollar capital, which enhances the potential for organic growth and inorganically.
Online Reporter