Tsogo Sun Hotels sells 50 percent stake in Maia Resort property to MH
The R465 million proceeds of the sale will go towards reducing the group's debt.
Tsogo Sun Hotels has sold its 50 percent stake in its Maia Resort property in the Seychelles for R465 million to MH, which is part of the Bangkok-based Minor Hotels Group.
The deal is aimed at reducing the group’s debt and also serves as a cushion to the blow dealt by Covid-19 on the tourism and hospitality industry.
According to a statement:
“Covid-19 has limited the group’s ability to apply its cash resources towards the settlement of this debt. The disposal consideration allows the group to achieve this objective and accordingly, the company believes that it is in the best interest of the group to dispose of the assets at this time.”
Tsogo Sun Hotels’ subsidiary, Southern Sun Africa, jointly developed the Maia Luxury Resort & Spa back in 2006 with Seychelles group United Resorts and Hotels.
Tsogo Sun Hotels CEO Marcel von Aulock told Moneyweb:
“The sale was a tough decision as Maia is arguably one of the top island resorts in the world and trades in the ultra-luxury segment. However, it made financial sense for us. We achieved a great price for our stake.”
He pointed out that the proceeds from the sale will effectively bring down the group’s debt by more than a third.
“In this context, we believe that we’ve absolutely made the correct financial decision…. In addition, while the Maia Resort is a very profitable property, it was the only resort we operated in the super-luxe segment of the hotel sector,” he added.
He said the sale of its Maia Resort stake does not mean the group will exit the Seychelles tourism market. “We still own the Paradise Sun resort in Seychelles, which was our first property on the island in the 80s. We don’t have plans to sell it or any of our other hotel properties in South Africa currently, despite the uncertainty around Covid-19.”
Only around 30 of its more than 100 hotels in South Africa are currently operating due to the impact of Covid-19, which has seen restrictions to domestic and international travel.