Minor International PLC Acquires Eight African Hotels for $63.9 Million

. August 22, 2014

August 22, 2014 - Africa's positive tourism and economic outlook has prompted SET-listed Minor International PLC to pay US$63.9 million for eight more hotels on the continent.

Chaiyapat Paitoon, vice-president for strategic planning, said Minor had secured a deal with South Africa's Sun International, which wanted to dispose of a portion of its hotel operations in Botswana, Lesotho, Namibia, Swaziland and Zambia.

Under the deal, Minor will own half of Zambia's 173-room Royal Livingstone and 212-room Zambezi Sun, 64% of Botswana's 196-room Gaborone Sun, 80% of Namibia's 173-room Kalahari Sands, 37.5% of Lesotho's 158-room Lesotho Sun and 105-room Maseru Sun and 40.5% of Swaziland's 149-room Royal Swazi and 202-room Ezulwini Sun.

"We see a lot of business opportunities in Africa and believe this new investment will generate a significant return," Mr Chaiyapat said.

Minor is confident the profit proportion of its African hotel portfolio will rise from a low single-digit figure to double digits within three years.

The eight new properties will be added to 13 the company already has in Mozambique, Tanzania and Kenya, giving it 21 African hotels.

However, Mr Chaiyapat said the deal required finalisation of transaction documents and regulatory approvals in the various jurisdictions where the African assets were located.

The sales and purchase agreements for the assets are interconditional since they are being sold together as a portfolio.

Average occupancy of the eight properties is estimated at 60%, while the Zambian and Botswanan hotels have an average room rate of $100-300 a night.

Dillip Rajakarier, chief executive of Minor Hotel Group, said the deal was the start of a partnership with the Johannesburg-based Sun International aimed at exploring other African business opportunities.

According to this year's edition of UNWTO Tourism Highlights, Africa continues to enjoy sustained growth, welcoming 55.8 million international tourists last year for revenue of $34.2 billion.

Annual tourism industry growth from 2005-13 averaged 6.1%.

Mr Rajakarier said the partnership was aimed at leveraging both companies' core strengths.

Sun International will continue to manage the casino operations, while Minor will assume hotel management, marketing and distribution under its Anantara and Avani brands.

MINT shares closed yesterday on the Stock Exchange of Thailand at 33.25 baht, up 50 satang, in trade worth 271 million baht.

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