Meikles to exchange $30m of Cape Grace, for equity in Mentor Holdings

All necessary approvals have been received for the exchange of the Meikles Group's investment in Cape Grace Hotel, for equity in Mentor Holdings. Mentor Holdings is a significant private equity group being established to invest in Africa and emerging markets. The value of the Cape Grace for the purposes of this transaction is $30 million. Meikles said further announcements will be made in due course with regards to this transaction.

Renovations for the Meikles Hotel North Wing have started following completion of the processes associated with the draw down of the PTA bank $6 million loan for this purpose. The Victoria Falls Hotel daily room rates improved to $154 from $137 in the comparative period.

The Cape Grace Hotel occupancies increased to 63% from 55% in the comparative period however average daily room rates were lower at R2,726 compared to R3,699 for the comparable prior period. The rate is lower for the comparative period but is satisfactory for the current market conditions. The CGH's forecast occupancies are higher than the previous periods and the hotel is expected to maintain a steady, yet dominant position.

Meikles advised that the outlook for Zimbabwean hotels is positive given increased tourism activity and traffic in the Victoria Falls area and Harare respectively.