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African Sun’s Main Shareholder Mulls Voluntary Liquidation

African Sun’s Main Shareholder Mulls Voluntary Liquidation

Arden Capital, the Johannesburg Stock Exchange (JSE)-listed private equity group that controls African Sun, is considering voluntary liquidation, painting a grim future for Zimbabwe’s hospitality industry.

Formerly known as Brainworks, Arden’s main investment is its 57% shareholding in African Sun’s 11 hotels, which include Crown Plaza Monomotapa, Elephant Hills, and part of the Victoria Falls Hotel.

In a notice on the JSE on Monday, Arden said that it can no longer remain in business.

It will now delist its JSE shares and unbundle them into Arden Enterprises Limited, a wholly-owned arm.

This will effectively make Arden a shell company and ease it into voluntary liquidation. The company said:

As a result of the ongoing erosion of value for shareholders, now coupled with the losses experienced by the group as a result of the COVID-19 pandemic thereby placing the company in considerable financial constraints, the board is proposing that shareholders consider and approve a Voluntary Liquidation of the company.

This is after exhausting all other avenues of seeking further investment from shareholders.

Arden is also selling its logistics company FML, which moves bulk fuel across the region, for US$1 million.

Arden will use that money to pay off debts, the company said in a separate JSE notice.

In June, Arden had warned that it was reconsidering its investment in African Sun due to the prolonged impact of COVID-19 on the hospitality industry.

Occupancy rates at African Sun fell to 23% last year, down from 48% in 2019.

This was the lowest ever level of business for the company, as tourism dipped 85% in Zimbabwe and global travel suffered.

More: newZWire

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