BUSINESS NEWS - South African hotelier Tsogo Sun said it could increase its stake in Hospitality Property Fund to as much as 60% as part of an exchange if it reaches agreement to sell more hotel assets to the fund.
Tsogo Sun acquired a 50.6% stake in Hospitality Property Fund, a real estate investment trust (REIT), last year in exchange for selling 10 hotels worth R1.78 billion to the fund. It is now in talks to sell additional hotel assets worth R3.3 billion to the fund.
“The fund is paying for properties from Tsogo with a combination of new shares and debt. We will therefore increase our holding to somewhere between 55 and 60%,” Tsogo Sun’s Chief Executive Marcel von Aulock told Reuters in an interview.
Tsogo, the owner of Gold Reef City and Montecasino, announced in 2015 that it planned to separately list its property portfolio but later abandoned the plan and said it would focus on building up a REIT to better compete with property rivals and create value for its hotel business and access new properties.
