City Lodge will reportedly sell four of its hotels in East Africa, including one in Tanzania and three in Kenya.
In its most recent move, City Lodge is reportedly selling its assets in East Africa to several subsidiaries of Actis, a UK-based investment company. These include three hotels in Kenya and another in Dar es Salaam, Tanzania.
City Lodge is selling its stakes in three hotels in Kenya, as well as its City Lodge Hotel Dar es Salaam in Tanzania as follows:
- Fairview Hotel, Nairobi (127 rooms)
- Town Lodge Upper Hill, Nairobi (84 rooms)
- City Lodge Hotel Two Rivers, Runda (171 rooms)
- City Lodge Hotel Dar es Salaam (148 rooms)
The sale of all four properties is valued at R142 million.
Easing debt
Like much of the hospitality sector, City Lodge’s profits have been impacted by the Covid-19 pandemic and the companyโs revenue across its 62 hotels plummeted by 73% between June and December last year, compared to the same period in the previous year.
During this time, City Lodge suffered a loss of R550 million, compared to a profit of R46 million in the previous year. The group noted that the sale of its assets in East Africa will be used to settle its debt.
โThe Board of Directors of City Lodge has previously communicated its desire to dispose of the Companyโs 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,โ said CLHL in its rationale in the announcement relating to the proposed disposal of East African hotel operations.
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