Serena Uganda to join TPSEA stable

May 24, 2010

, NAIROBI, Kenya, May 24 – Tourism Promotion Services Eastern Africa (TPSEA) will soon consolidate its regional presence after receiving the green light from its shareholders to integrate TPS Uganda into the listed holdings company.

Managing Director of the firm that owns the Serena Hotels Mahmud Jan Mohamed said on Monday that incorporating the Ugandan firm into the group would go a long way in enabling them to cushion the entity against losses and also increase their shareholders’ value.

“This now gives TPSEA a presence in Uganda and obviously in the long term our objective is to continue with the strategy and hopefully bring in Rwanda and (later) Mozambique to make our public company a very strong vehicle,” he said.

The firm enhanced its presence in Uganda late last year with the acquisition of ‘The Ranch on the Lake’ now Lake Victoria Serena Resort which is the second TPS operation after Kampala Serena.

The integration of TPS Uganda will follow its acquisition through a 100 percent share swap and will go ahead once the requisite regulatory approvals from both Kenya’s and Uganda’s Capital Markets Authorities and the Nairobi Stock Exchange are granted.

A detailed pricing structure and timings of how the process will take place will be released once the group gets the nod from the authorities.

TPSEA started implementing this strategy in 2004 when it integrated the Tanzanian and Zanzibar operations with Kenya’s in a bid to diversify its risk.

This has worked positively for the company particularly in 2008 when the negative impact of the post election violence negatively affected Kenya’s tourism sector, Tanzanian’s operations contributed significantly to the entity’s bottom line.

Mr Mohamed reckoned that the process to bring in more units into the TPSEA would be a medium term venture that would take about four years to conclude.

“It will take place when these operations are mature enough; it’s as and when we feel that there is a win-win situation for both shareholders of the Eastern Africa and in the new company,” he added.

The MD spoke during the 38th Annual General Meeting where shareholders also approved a one-share-for-every-five-held Rights Issue through which the company seeks to raise Sh1.2 billion and a bonus issue of one share for every six held.

The shareholders also unanimously agreed to have the company increase the authorised share capital from Sh106 million to Sh192 million. This, the management explained, would create adequate room to cover the two issues. It will also give the company the flexibility to implement future issues without the need to raise the share capital again.

Proceeds from the issue will be used to fund various projects including the renovation of Nairobi’s Serena hotel.

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