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Fairmont Zimbali Resort
- The Fairmont Zimbali Resort has been put on corporate bailout.
- Its Kuwait-based owner, IFA Hotels & Resorts, first invested in the hotel in 2003.
- South Africa hotels have been hit hard by the prolonged closure. Last month, the US hotel giant Marriott resigned its contract to manage three local hotels.
- For more articles, visit www.BusinessInsider.co.za.
The Kuwaiti owner of the Fairmont Zimbali Resort on the vast Zimbali estate near Ballito has put the high-end hotel on a corporate bailout.
“The extraordinary circumstances of a prolonged lockdown … with limited government support eroded our revenue base,” said resort general manager Wayne Krambeck. “Losses that will be incurred in a gradual return to normalcy with constant uncertainty and the possible threat of further restrictions are simply not commercially viable. We have had no alternative but to request the business rescue ”.
South African hotels have been bleeding during the closure, and since last month they have only been allowed to accept leisure travelers from other provinces. International borders have been closed for almost half a year.
In August, the American hotel giant Marriott announced that it would cease operating three hotels, the Mount Grace in Magaliesburg, the Edward in Durban and the Protea Hotel Hazyview in Mpumalanga, South Africa. Other major hotels have struggled as well, with Cape Town’s iconic Mount Nelson Hotel cutting down more than half of its 251 employees.
In 2003, Kuwait-based IFA Hotels & Resorts purchased a 50% stake in the Zimbali complex for R65 million from the real estate development division of sugar producer Tongaat Hulett, Moreland. Together, the companies planned to invest $ 100 million in the Zimbali complex and the hotel opened in 2010.
IFA has since invested in other Zimbali developments, including another hotel in the residential development, the Zimbali Lodge.
Only the Fairmont Zimbali Resort will be put on corporate bailout, a spokesperson confirmed.
The resort has more than 170 rooms and villas, and Krambeck says it experienced “exponential growth with record turnover” from November 2019 to March 2020, before the closure began.
It has been closed to guests since then and will be closed for now.
Business rescue details
Pierre Berrange has been appointed as the hotel’s business rescue professional.
The business rescue aims to “rehabilitate” a company that is in serious danger. The business rescue professional has to run and restructure the business with the goal of putting the business on a sustainable footing and saving jobs.
If the company cannot be saved, the professional should try to guarantee better returns for the creditors.
Business rescue offers protection against legal claims from creditors.
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