Thursday, 25 February 2016

African Sun clears $200k Vic Falls debt

African Sun Limited has paid more than $200,000 to clear its outstanding rates and water bills to the Victoria Falls Municipality.

In June last year, the hotel group was issued with summons in respect of the outstanding rates amounting to $383,000 owed by three of its hotels — The Victoria Falls Hotel, the Elephant Hills Resort and The Kingdom Hotel — in the resort town.

The amount took into account an increase of at least 250 percent on the rates and water bills. The listed hotel group had stopped payments as the company felt the increment was too high at a time the company’s hotel units were operating below capacity.

After it was issued with summons, the group engaged the council with a view to break the impasse.
African Sun has 731 rooms in Victoria Falls, about 66 percent of the resort town’s accommodation capacity.

African Sun and the town council agreed to resolve the matter out of court after the former came up with a debt payment plan, which was accepted by the municipality.

The hotel group had proposed a rate, which would have seen it paying a total $203,000 to clear the arrears. But the council declined to reduce the rate and instead offered a discount on condition that its proposed amount was paid by December 31.

The group proposed monthly rates of $7,800 for Victoria Falls Hotel, $7,500 for Elephant Hills and $5,500, $1,271 for the Kingdom at Victoria Falls Hotel.

Council had proposed much higher rates at $9,620,22, $9,426,73 and $8,409,31. The municipality had hiked rates from $3,018, $2,985 and $1,271 respectively, for the group’s three hotels.

The council argued that it could not reduce rates, which had been gazetted, midway into the financial year unless it was to be done through a supplementary budget and all processes were followed to either reverse or reduce the gazetted rates. But they promised the “proposal will certainly be considered in the budget for 2016.”

African Sun paid a total of $202,890 in three equal installments of $67,630 by December.
“It’s the company’s view that all due process was followed and this matter was concluded and the municipality accepted the company’s proposal. All the arrears to Victoria Falls Municipality from July 2015 to the end of December 2015 for the three hotels were paid in full,” the hotel group said. The municipality said it acknowledged the difficulties faced by African Sun considering the difficulties in the business environment.

“Victoria Falls in its full special council meeting held on October 22, 2015 resolved to accept your proposal in its entirety contained in your letter dated October 9 2015. The council appreciates the finality of this matter, which was made possible by your commitment and sincerity in the discussion on the matter,” the council said.

African Sun, however, said that the only outstanding matter is that the municipality of Victoria Falls has not yet approved the proposed rate for 2016 for its three hotels.

Source: African Sun clears $200k Vic Falls debt (24/02/16).

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