Tsogo Sun Hotels sells Seychelles stake

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Tsogo Sun Hotels sells Seychelles stake

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Published Date: 2020-07-15 | Source: Stephen Gunnion | Author: Stephen Gunnion

Tsogo Sun Hotels sells Seychelles stake

The hotel group says Covid-19 has limited its ability to reduce debt, which will be achieved through the disposal of its URH stake.

Tsogo Sun Hotels has sold its 50% stake in United Resorts and Hotels (URH) so it can reduce its debt. URH owns hotel property and land on a leasehold basis at Anse Louis on the Seychelles' Mahé Island, including 30 luxury villas, known as Maia Luxury Resort and Spa.

The hotel group said plans to reduce debt following its unbundling and separate listing from Tsogo Sun Gaming last year had been hampered by Covid-19. The pandemic had limited its ability to apply its cash resources towards settling debt and the disposal of URH would help it achieve its objective. Subsidiary Southern Sun Africa is selling the stake to MH Limited, part of the Minor Hotels Group, and will receive aggregate proceeds of $27.8m, or around R465 million. This will be applied towards its US dollar denominated net debt of $72 million.

Tsogo Sun's investment in URH is classified as an investment in a joint venture and accounted for on an equity basis. Its carrying value was R124 million at the end of March. Its share of URH's profit and management fees after tax for the year to end-March was R13 million.

The group's shares fell 5.8% to R2.17 yesterday.





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