| Wed 30 May 2012, 7:05 | | CLH - City Lodge Hotels Limited - Voluntary Announcement: City Lodge Hotels |
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CLH
CLH
CLH - City Lodge Hotels Limited - Voluntary Announcement: City Lodge Hotels
gains important foothold in East Africa as part of ongoing African Expansion
Drive
City Lodge Hotels Limited
"City Lodge"
(Reg. No. 1986/002864/06)
(Incorporated in the Republic of South Africa)
Share Code: CLH
ISIN Code: ZAE000117792
VOLUNTARY ANNOUNCEMENT: CITY LODGE HOTELS GAINS IMPORTANT FOOTHOLD IN EAST
AFRICA AS PART OF ONGOING AFRICAN EXPANSION DRIVE
Adding further impetus to its expansion drive into selected parts of East, West
and southern Africa, the City Lodge Hotels group has reached agreement with the
shareholders of Fairview Hotel Limited to acquire a 50% stake in that company
which owns and operates two hotels in the Upper Hill area of Kenya`s capital
city, Nairobi.
The two hotels are the 120 room Fairview Hotel, a well established and highly
regarded hotel in Nairobi, and the adjacent 84-room Country Lodge. The company
is owned by the Szlapak and Abbema families and is a third generation family
business.
The transaction is effective from 1 June 2012 but remains subject to regulatory
approvals in Kenya and the South African Reserve Bank`s approval.
City Lodge has formed a joint venture to explore further expansion opportunities
in East Africa together with Mark Abbema and Daniel Szlapak who will be joint
CEOs of this operation. The initial focus will be on identifying potential sites
for development in Kenya, Tanzania, Rwanda and Uganda.
While the Fairview Hotel will retain its name, Country Lodge will be rebranded
to Town Lodge, in line with City Lodge`s intention to increase the penetration
of its brand names in other parts of Africa.
"We see this as a great opportunity to acquire a shareholding in two very well
run hotels as a going concern," said Clifford Ross, City Lodge`s Chief
Executive.
"Through this transaction and our joint venture going forward, we will be able
to leverage local knowledge of the East African market to achieve our ongoing
expansion objectives."
"This joint venture with City Lodge Hotels is a great combination of strengths,"
said Mark Abbema, Joint Managing Director of Fairview Hotel & Country Lodge.
"We look forward to introducing hotel brands to the region that allow business
and leisure travelers to enjoy great value."
City Lodge`s entrance into the Kenyan market is its second expansion outside of
South Africa, following its announcement earlier this year that it was
developing a 106 room Town Lodge in Gaborone, the capital city of Botswana. This
hotel is on track for completion in December.
Currently, the group has 52 hotels in South Africa offering 6,440 rooms across
the Courtyard, City Lodge, Town Lodge and Road Lodge brands. Its hotel under
development in Gaborone and its stakes in the two Nairobi hotels will take its
portfolio to 55 hotels with 6,750 rooms under management.
"This investment into the Kenyan market comes after considerable examination and
investigation and provides an excellent platform for our expansion in East
Africa,` said Ross.
"We continue to examine expansion opportunities in West Africa and in Southern
African Development Community (SADC) countries."
The transaction is below the transaction thresholds as set out in the JSE
Listings Requirements and is therefore a voluntary announcement, for information
purposes only.
Bryanston
30 May 2012
Sponsor
J.P. Morgan Equities Limited
Date: 30/05/2012 07:05:08 Produced by the JSE SENS Department.
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