Online Reporter
Nelson Gahadza
African Sun Limited shareholders have approved a plan to voluntarily delist the hospitality group from the Victoria Falls Stock Exchange, in a strategic shift aimed at unlocking value and repositioning the business for long-term growth.
Speaking at the company’s extraordinary general meeting in Harare on Thursday, board chairman Mr Lloyd Mhishi said the move was a calculated step designed to ensure the company remains in control of its strategic direction.
“Every move we have made, including our proposal to delist, is about ensuring that African Sun remains the master of its own destiny. To the casual observer, this may look like a step backwards, but in reality, it is a necessary step to address a clear disconnect between our market valuation and the true value of our assets,” he said.
The hospitality group, which was listed on the VFEX in 2021 following a restructuring exercise, has struggled due to low liquidity in the market and thin trading volumes.
According to Mr Mhishi, this has resulted in the company’s share price failing to reflect the underlying value of its portfolio, particularly following the integration of key properties in 2020.
“Our market price currently does not reflect the company’s true performance or the inherent value of the properties we have worked so hard to integrate,” he said, adding that investor sentiment is that the listing has not delivered expected benefits such as efficient price discovery or capital-raising opportunities.
As part of the delisting plan, African Sun is offering to buy back up to 40 percent of its shares at US$5,17 each, representing a premium of about 36 percent to the prevailing market price, providing an attractive exit opportunity for shareholders.
Mr Mhishi said the decision was also driven by the high costs associated with maintaining a public listing relative to the limited benefits currently being realised.
“With no immediate intention to raise capital from the market, the ongoing benefits of remaining listed have become minimal,” he said.
“Delisting will materially reduce regulatory, reporting and compliance costs, allowing management to redirect resources towards operations and growth initiatives.”
The group intends to channel savings and capital towards refurbishing and upgrading its key hospitality assets, with a particular focus on high-value properties in Victoria Falls and major urban centres.
These include the Elephant Hills Resort, Holiday Inn properties in Harare, Bulawayo and Mutare, as well as the iconic The Victoria Falls Hotel, in which the group has a strategic interest.
“We have taken a deliberate decision to focus on what we know best: hospitality. By concentrating resources on our high-performing assets, particularly in Victoria Falls, we believe we can enhance shareholder value and create a strong platform for future growth,” said Mr Mhishi.
The restructuring strategy also includes the disposal of non-core assets to unlock capital. African Sun recently confirmed it will cease operations at Caribbea Bay Resort in Kariba, with the property set to be taken over by the Public Service Pension Fund as a going concern.
Proceeds from such disposals will be reinvested in priority assets as part of a broader turnaround plan aimed at improving service delivery, strengthening liquidity and boosting profitability.
Despite concerns that delisting could limit access to capital, Mr Mhishi expressed confidence that the group would be able to secure funding through alternative channels, including private equity.
“We are not anti-growth. In fact, we believe delisting will give us greater agility and speed in sourcing capital for refurbishment and expansion. The current environment has limited the advantages of being listed, but this does not close future opportunities,” the chairman said.
He added that the board remains open to relisting in the future should market conditions improve.
