Sunbird Tourism Limited has said there are indications that government may reduce its shareholding in the listed hotel chain based on the discussions they have been having with Treasury.
Currently, government holds 71 percent of shares in the group, which listed on the Malawi Stock Exchange (MSE) in 2002, followed by a United Kingdom (UK)-based investor Noel Hayes with 16.44 percent and the remaining 12.56 percent is held by the public.
Sunbird acting chief executive officer Patrick Lisilira, in an interview on Monday, said government is receptive to the idea by Sunbird to dilute its shareholding.
“Government is seeing the sense that we improve the product that we have. We have big plans for further growth and there are indications that government can let go some of its shares.
“Currently, we have a number of investors interested in Sunbird to finance our growth projects. For example, Sunbird Lilongwe needs serious renovations and we need a lot of money to come in as equity,” he said.
Minister of Industry, Trade and Tourism Joseph Mwanamvekha in an interview on Tuesday said they are exploring ways to raise resources for Sunbird.
He said: “We are looking at several options, which include government selling their shares or going for what we call private placement.
“We are in serious discussions with Sunbird management exploring a number of ways to see how we can recapitalise.”
In business, private placement or non-public offering, is a funding round of securities, which are sold not through a public offering, but rather through a private offering, mostly to a small number of chosen investors.
In May this year, Sunbird board chairperson Phillip Madinga told Business News that limited resources are hampering expansion projects as well as renovations the hotel chain needs to undertake.
“We believe it is high time government decided its intentions about the future of this key franchise for the tourism sector in Malawi because our ability to embark on new projects and refurbish our hotels and infrastructure is currently being hampered by limited funding that we can raise at a particular time,” he said.
Sunbird has seven hotels and lodges in all the country’s regions