City Lodge Announces The Sale Of Its East African Operations
City Lodge Announces The Sale Of Its East African Operations. City Lodge has announced the proposed sale of its East African operations, comprising of its hotels situated in Kenya and Tanzania.
The first sale of shares transaction regulated in terms of a sale of shares agreement (the “Kenya Sale Agreement”) relates to the disposal of shares beneficially owned by City Lodge in Kenya to Ukarimu Limited, which is beneficially owned by Actis Africa Real Estate 3 LP (“Actis”), a leading global investor in sustainable real estate and infrastructure. City Lodge and Property Lodging Investments Proprietary Limited (a wholly owned subsidiary of City Lodge) will dispose of their entire shareholding in Fairview Hotel Limited, constituting 100% (one hundred percent) of the entire issued share capital of Fairview to Ukarimu.
The second sale of shares transaction regulated in terms of a sale of shares agreement (the “Tanzania Sale Agreement”) relates to the disposal of shares beneficially owned by City Lodge in Tanzania (the “Tanzania Disposal”) to Faraja Limited (“Faraja”), which is also beneficially owned by Actis. In terms of the Tanzania Disposal, City Lodge Hotels (Africa) Proprietary Limited (“CLHA”) (a wholly owned subsidiary of the Company) and City Lodge will dispose of their entire shareholding in CLHG Tanzania Limited (“CLT”), constituting 100% (one hundred percent) of the entire issued share capital of CLT to Faraja.
The Board of Directors of City Lodge has previously communicated its desire to dispose of the company’s entire East African hotel portfolio together in order to reduce debt levels within the City Lodge group, increase group liquidity and eliminate ongoing operating losses and further funding requirements.
The shares in respect of the Kenya Disposal will be disposed of for an aggregate consideration of ZAR140 968 036 (one hundred and forty million nine hundred sixty eight thousand thirty six Rand), which will be settled in cash by Ukarimu. The shares in respect of the Tanzania Disposal will be disposed of for an aggregate consideration of ZAR1 000 000 (one million Rand), which will be settled in cash by Faraja.
