July 3, 2020 / 3:42 PM / a month ago

Tsogo Sun to buy additional shares in Hospitality Property Fund

JOHANNESBURG, July 3 (Reuters) - Tsogo Sun Hotels said on Friday it proposed to buy additional shares in real-estate investment trust Hospitality Property Fund as the fund was trading at a substantial discount to its net asset value.

The company said that to buy the additional Hospitality shares Tsogo may have to issue new ordinary shares. Shareholders will have to agree to the move.

Tsogo Sun did not disclose the size of stake it would pick up in the property fund or give details of the deal’s value.

Tsogo Sun, one of South Africa’s biggest hotel groups, has been hit hard by the impact of the coronavirus crisis.

Last month, the company reported a 9% fall in annual core earnings and scrapped its final dividend for the year as a sharp drop in local and international travel took a toll on its business.

It already operates a number of hotels owned by Hospitality which make up the majority of both companies’ value, Tsogo Sun said.

Tsogo Sun shares were 0.23% higher at 1453 GMT.

Reporting by Emma Rumney Editing by Promit Mukherjee and Jane Merriman

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