Fairmont Zimbali Hotel sold for a song in industry rescue attempt
The embattled Fairmont Zimbali Hotel on the north coast of KwaZulu-Natal has been acquired by The Capital Hotels and Apartments for R240 million (about US$16.3 million).
DURBAN, March 19 (ANA) – The Fairmont Zimbali Hotel on the north coast of KwaZulu-Natal has been acquired by The Capital Hotels and Apartments for R240 million (about US$16.3 million).
The Capital Hotels confirmed in a statement on Friday that the business rescue practitioners (BRPs) who were appointed to the company earlier this year had chosen them as the “preferred bidder”.
The company said the deal was likely to go through once all the pieces had fallen into place, which also entails approval from the Competition Commission of South Africa.
“The Capital Hotels and Apartments has built its portfolio of hotels by investing in the market at times when others would not, by identifying suitable distressed properties to add depth and value to our mix of business and leisure offerings,” said Marc Wachsberger, managing director of The Capital Hotels and Apartments.
In September last year, following the outbreak of Covid-19 and its accompanying financial implications, the Fairmont Zimbali announced that it had applied for voluntary business rescue.
“In light of the Covid-19 pandemic, Fairmont Zimbali Resort will be closing its doors operationally from today until further notice,” the company said in a statement last year.
General manager Wayne Krambeck said the decision to enter business rescue was taken to safeguard the interests of all the stakeholders.
“The consequent stagnation in global economic activity together with the South African government-imposed national state of disaster has impacted negatively on our business,” Krambeck said.
The 18-acre property, located in the heart of the Zimbali Coastal Resort eco-estate, boasts 150 rooms and suites, conferencing for 750 delegates, restaurants and outdoor living spaces. The resort was developed at a cost of around R600 million.
The Capital Hotels and Apartments will, upon a successful acquisition, invest another R30 million to cover property renovations and a refurbishment project to transform the hotel according to its vision.
The new version of the hotel will be called The Capital Zimbali and is likely to open its doors to guests in September, explained Wachsberger.
“The Fairmont Zimbali Resort is an iconic landmark on the KwaZulu-Natal North Coast and a destination of choice for South Africa’s domestic leisure market, and among conference organisers.
“We are looking forward to welcoming guests to the property in September, once the roll-out of Covid-19 vaccines has made domestic travel more appealing and the country is beyond the anticipated third wave of the pandemic,” Wachsberger said.
KZN Economic Development MEC Ravi Pillay welcomed the news of the Fairmont Zimbali acquisition, adding that the deal would save dozens of jobs at the establishment.
“We are very delighted with this development especially because 143 jobs will be saved as part of the process. What is even more interesting is that the potential buyer is planning a multimillion-rand investment on the establishment. This means more jobs may be created as part of that process,” Pillay said in a statement on Friday.
Pillay said the move to acquire the Fairmont Zimbali was much needed and would prove helpful in restoring the province’s economy, which to some extent relies on the tourism industry.
Pillay said they expected the upcoming Easter season to be fruitful for the tourism industry, but remained steadfast in enforcing Covid-19 compliance.
“While we encourage domestic visitors to explore our province, we are equally working hard to limit the spread of the virus. We encourage both the establishments and visitors to adhere to all the safety protocols,” said Pillay.
– African News Agency (ANA); Editing by Yaron Blecher
