Staff Writer
First Capital Bank Limited and its staff pension fund have signed a binding share purchase agreement to dispose of their entire shareholding in Makasa Sun to ASB Hospitality of the United Arab Emirates in a US$30 million transaction, the bank announced yesterday.
The move follows cautionary statements issued on 17 September, 8 October and 29 October and marks one of the most significant divestments of a non-core asset by a Victoria Falls Stock Exchange-listed company this year.
The deal will see the purchaser acquire 100 percent of the issued ordinary and redeemable preference shares in Makasa Sun once all regulatory approvals are secured.
The proposed disposal will transfer full ownership of the Makasa Sun hotel asset, jointly held by First Capital Bank and the First Capital Bank Staff Pension Fund, to the UAE investor.
Under the agreement, ASB Hospitality has already deposited US$3 million into escrow as part of the consideration. The remaining US$27 million will be paid on completion, subject to fulfilment or waiver of conditions precedent.
Regulatory approvals required include Reserve Bank of Zimbabwe Exchange Control clearance, authorisation by the COMESA Competition and Tariff Tribunal working with Zimbabwe’s Competition and Tariff Commission, and capital gains withholding tax clearance from the Zimbabwe Revenue Authority.
The effective completion date will be confirmed once these approvals are obtained.
As at 31 October 2024, Makasa Sun’s consolidated net asset value stood at US$27,978,445. First Capital Bank holds a 50 percent interest, valued at US$15 million, and does not consolidate the hospitality subsidiary in its group financials.
According to the bank, Makasa Sun has been classified as a dormant entity and, as such, the disposal is not expected to materially affect the bank’s earnings or headline earnings per share.
Similarly, net asset value per share and net tangible assets per share are not projected to change significantly, apart from adjustments relating to taxes, transaction costs and the eventual deployment of proceeds.
The deal qualifies as a Category 3 transaction under VFEX Listings Requirements, as the value of the asset represents 11.19 percent of First Capital Bank’s market capitalisation recorded at US$134 million at the time of the first cautionary on 17 September.
The board said the rationale behind the divestment is to unlock shareholder value by offloading a non-core hospitality asset so management can concentrate on strengthening the bank’s core banking and financial services portfolio.
ASB Hospitality is described as an international investment company supported by global hotel operator brands. Its entry is expected to reposition the Makasa Sun property and potentially stimulate further investment into Zimbabwe’s tourism and hospitality sector.
The bank and pension fund will apply the proceeds towards meeting capital gains tax obligations and distributing the remaining funds according to their shareholding structure. The bank intends to channel its share into core business operations, while the pension fund will allocate its portion to member obligations and other investments.
The transaction is purely a cash deal with no securities being received as consideration.
The board urged shareholders and the investing public to continue exercising caution when trading the bank’s shares until all conditions precedent are fulfilled and a detailed update on the transaction’s progress is published.
“Completion of the transaction remains subject to regulatory approvals and satisfaction of conditions precedent,” Company Secretary Sarudzai Binha said in the statement issued yesterday.
The deal underscores a growing trend in which listed financial institutions are disposing of legacy or non-performing hospitality assets in order to streamline balance sheets and enhance capital efficiency.
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