In line with the group’s hotel expansion project across Africa, Tsogo Sun Group, foremost South African based hotel Management Company, has acquired 75 percent share in Ikoyi Hotels Limited, the holding company of the Southern Sun Ikoyi Hotel.
With the controlling share, the hotel management company would be investing $70 million (R630 million) more aimed at lifting the hotel to the group’s standard and broadening its reach across West Africa with Nigeria as a launch pad.
The investment includes loan funding, while the acquisition is subject to several conditions precedent including regulatory approvals.
Shareholders will be notified once these have been fulfilled and the acquisition becomes effective. However, the acquisition, according to Marcel von Aulock, CEO of Tsogo Sun, is not a categorised transaction in terms of the Listings Requirements of the JSE Limited.
The hotel 195-room hotel with additional land available for future expansion has been managed by the Group for the original developers since opening in 2009.
“This acquisition will cement our presence within the fast growing and progressive Nigerian economy as well as provide a base from which to expand our operations in Nigeria. The investments totaling $100 million will be funded through a combination of existing offshore cash and borrowing facilities’’, Marcel von noted.
The CEO noted that the total investment across Africa stands at $100 million. While the Ikoyi-Nigeria project gulps $70 million, Tsogo Sun will spend $30 million (R270 million) to expand its hotel in Mozambique, the Southern Sun Maputo.
This will involve a complete refurbishment of the existing 158 room hotel, including the bedrooms and public areas as well as an expansion of the restaurant, the addition of 110 new hotel rooms as well as new conferencing facilities. The expansion takes advantage of the unique location of the hotel, extending along the beachfront on the Avenida de Marginal.
“The Mozambican economy has shown encouraging signs of growth in recent years, and Tsogo Sun has benefited from a strong trading performance at the Southern Sun Maputo. The Group has for some time been planning to utilize the additional land owned next to the hotel and believe that this exciting expansion programme will cement the Southern Sun Maputo as the destination hotel of choice in the city”, Von Aulock stated. Tsogo Sun operates hotels in seven African countries including South Africa, Mozambique, Zambia, Tanzania, Kenya, Nigeria and the Seychelles.
