Capital Hotels Group throws Fairmont Zimbali a R240m lifeline

Ballito’s struggling iconic Fairmont Zimbali Hotel has been thrown a lifeline in a R240 million rescue deal with Capital Hotels Group.

Last month the South African hotel group was confirmed as the preferred bidder for the luxurious resort, with the deal likely to be completed once conditions – including creditors accepting the business rescue plan and the Competition Commission’s approval – have been met.

The five-star hotel inside the exclusive Zimbali Coastal Resort Eco-Estate was placed into business rescue last September, after the Covid-19 pandemic decimated the country’s hospitality and tourism sector.

The prolonged 176-day lockdown was blamed for eroding its revenue base.

The hotel was closed for guests on March 23, and retrenched 220 staff last October.

The 154-room hotel is owned by Kuwait-based IFA Hotels & Resorts, one of the biggest foreign investors on the North Coast, and was developed at a cost of more than R600 million ahead of the 2010 Fifa World Cup.

Pietermaritzburg-based lawyer and business rescue practitioner, Pierre de Villiers Berrangé was appointed to handle the business rescue process – an alternative to the liquidation or winding-up of the company.

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According to the new Companies Act the aim of business rescue is to restructure the affairs of a company in such a way that either maximises the likelihood of the company continuing in existence on a solvent basis or results in a better return for the creditors of the company than would ordinarily result from liquidation.

The business rescue notice for the hotel stated that the company was unlikely to pay all of its debts and was expected to become insolvent within 6 months.

However, Capital Hotels and Apartments founder and managing director Marc Wachsberger said the company would invest R30-million in an extensive renovation and refurbishment project, including transforming suites into flexible apartment-style accommodation.

“We are looking forward to welcoming guests to the property in September once the roll-out of Covid-19 vaccines has made domestic travel more appealing, and the country is beyond the anticipated third wave of the pandemic,” said Wachsberger.

The Capital Hotels and Apartments owns several high-end establishments including The Capital Pearls in Durban.

KZN’s Economic Development and Tourism Department has welcomed the deal and the saving of 143 jobs.