Overview
Taj Pamodzi Hotels Plc, Zambia’s only publicly listed hospitality company, is in the process of being delisted from the Lusaka Securities Exchange (LuSE) following a significant change in ownership. Earlier this year, Tata International Singapore Pte Limited (TISPL) sold its 90% stake in the company to ASB Hospitality LLC, a subsidiary of the Dubai-based Albwardy Group, for US$18 million. This deal marked a key moment in the African hospitality market, signalling the growing influence of Gulf investors in the region.
ASB Hospitality is renowned for its expertise in the hospitality industry and manages several prestigious hotels, including Meikles in Zimbabwe, and international brands like Hyatt and Four Seasons in various countries. With its acquisition of Pamodzi Hotels, ASB Hospitality is poised to upgrade the hotel, train staff, and strengthen its market position.
What This Means for Investors
The delisting of Taj Pamodzi Hotels Plc is set to take effect on 16th October 2024, and this will mark the company’s exit from the public market, meaning its shares will no longer be traded on the LuSE. After the delisting, any share trades will have to take place privately, in what is referred to as Over the Counter (OTC) trading. As these private trades will not occur on the LuSE, they may incur Property Transfer Tax (PTT), which is something investors should keep in mind.
For minority shareholders, ASB Hospitality has made a cash offer of K4.62 per share, valid until the last day of trading on 16th October 2024. This offer presents an opportunity for shareholders to sell their shares before the company delists, potentially avoiding the complications of OTC trading and any additional taxes.
Impact on the Hospitality Industry
ASB Hospitality’s acquisition signals a positive turn for the future of Taj Pamodzi Hotel. The Albwardy Group, known for managing world-class hotel brands like Hyatt and Four Seasons, brings extensive experience and resources to the Zambian market. This acquisition promises an upgrade in hotel facilities, upskilling of local staff, and a strengthening of the hotel’s brand.
The acquisition is part of ASB Hospitality’s strategy to expand its global footprint in strategic locations, enhancing its network of hotels to provide guests with seamless services across different countries. This bodes well for the long-term prospects of Taj Pamodzi, potentially attracting more tourists and business travellers to Zambia.
What Should Investors Do?
For shareholders, this is a crucial moment. The K4.62 per share offer from ASB Hospitality is an attractive option for those who wish to exit their investment before the delisting occurs. Selling now could help investors avoid the uncertainties and potential costs associated with OTC trading, including the Property Transfer Tax.
However, for those who believe in the long-term potential of the hotel under ASB Hospitality’s management, holding onto the shares might offer future rewards, as the hotel could see significant growth and improvements. However, investors must be prepared to trade their shares privately once the company is no longer listed on the LuSE.
Conclusion
The delisting of Taj Pamodzi Hotels Plc from the LuSE is a key development for both the company and its shareholders. ASB Hospitality’s acquisition offers new growth opportunities for the hotel, with expected upgrades and brand strengthening under its management. However, investors must carefully consider whether to take the current cash offer or hold onto their shares, keeping in mind the tax implications and changes in trading conditions post-delisting. Shareholders who wish to sell should act before 16th October 2024, while those opting to hold will need to prepare for private trading in the future.
