Firm to buy Mauritius resort

Mara Delta wants to acquire the Tamassa Resort in Mauritius for the euro equivalent of $40 million.

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Pretoria - Listed property company Mara Delta has entered into a non-binding heads of terms with Nereide, a wholly-owned subsidiary of Lux Island Resorts, to acquire the Tamassa Resort in Mauritius for the euro equivalent of $40 million (R543m).

It was established in November by listed property funds Delta Africa and Pivotal with the aim of creating a property powerhouse on the African continent.

The proposed acquisition is still subject to certain conditions precedent, including approval from the Board of Investment of Mauritius and the exchange and execution of a binding sale and purchase agreement acceptable to both parties.

In terms of the non-binding agreement, the property will be leased back to Nereide after the finalisation of the proposed acquisition for an initial period of 10 years, with the option to renew for a minimum duration of the initial lease term.

Mara Delta said yesterday that the annual rent payable during the initial period of the lease would represent between 8 percent and 9 percent of the purchase consideration, resulting in a yield accretive investment for the company.

The company added that Lux Island Resorts was one of the largest listed hotel chains in Mauritius, with a market capitalisation of about $228.5m, and would provide a guarantee for lease payments over the duration of the lease.

Mara Delta advised shareholders to exercise caution when dealing in the company’s shares until the binding sale and purchase agreement was signed and an announcement made on the full terms of the transaction.

BUSINESS REPORT