Actis to acquire City Lodge hotels in Kenya and Tanzania

South Africa’s City Lodge Hotels has announced it will sell its East African operations, comprising its hotels situated in Kenya and Tanzania.

The first transaction relates to the disposal of shares beneficially owned by the company in Kenya to Ukarimu Limited, which is owned by Actis Africa Real Estate 3 LP, a global investor in real estate and infrastructure.

The second sale of shares transaction relates to the disposal of shares beneficially owned by the company in Tanzania to Faraja Limited, which is also beneficially owned by Actis.

In Kenya, City Lodge owns hotel properties and land on leasehold bases known as the Fairview Hotel (comprising 127 rooms), City Lodge Hotel at Two Rivers (comprising 171 rooms) and Town Lodge Upper Hill (comprising 84 rooms).

In Tanzania, City Lodge owns a hotel property and land on a leasehold basis in Dar es Salaam comprising 148 rooms, known as City Lodge Hotel Dar es Salaam.

The board of directors of City Lodge has previously communicated its desire to dispose of the company’s entire East African hotel portfolio together in order to reduce debt levels within the City Lodge group, increase group liquidity and eliminate ongoing operating losses and further funding requirements.

The shares in respect of the Kenya disposal will be disposed of for an aggregate consideration of R140,968,036 (about $9.5 million), which will be settled in cash by Ukarimu.

The shares in respect of the Tanzania disposal will be disposed of for an aggregate consideration of R1 million (about $67,000), which will be settled in cash by Faraja.

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