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CLH - City Lodge Hotels Limited - Voluntary Announcement: City Lodge Hotels gains important foothold in East Africa as part of ongoing African Expansion Drive City Lodge Hotels Limited "City Lodge" (Reg. No. 1986/002864/06) (Incorporated in the Republic of South Africa) Share Code: CLH ISIN Code: ZAE000117792 VOLUNTARY ANNOUNCEMENT: CITY LODGE HOTELS GAINS IMPORTANT FOOTHOLD IN EAST AFRICA AS PART OF ONGOING AFRICAN EXPANSION DRIVE Adding further impetus to its expansion drive into selected parts of East, West and southern Africa, the City Lodge Hotels group has reached agreement with the shareholders of Fairview Hotel Limited to acquire a 50% stake in that company which owns and operates two hotels in the Upper Hill area of Kenya`s capital city, Nairobi. The two hotels are the 120 room Fairview Hotel, a well established and highly regarded hotel in Nairobi, and the adjacent 84-room Country Lodge. The company is owned by the Szlapak and Abbema families and is a third generation family business. The transaction is effective from 1 June 2012 but remains subject to regulatory approvals in Kenya and the South African Reserve Bank`s approval. City Lodge has formed a joint venture to explore further expansion opportunities in East Africa together with Mark Abbema and Daniel Szlapak who will be joint CEOs of this operation. The initial focus will be on identifying potential sites for development in Kenya, Tanzania, Rwanda and Uganda. While the Fairview Hotel will retain its name, Country Lodge will be rebranded to Town Lodge, in line with City Lodge`s intention to increase the penetration of its brand names in other parts of Africa. "We see this as a great opportunity to acquire a shareholding in two very well run hotels as a going concern," said Clifford Ross, City Lodge`s Chief Executive. "Through this transaction and our joint venture going forward, we will be able to leverage local knowledge of the East African market to achieve our ongoing expansion objectives." "This joint venture with City Lodge Hotels is a great combination of strengths," said Mark Abbema, Joint Managing Director of Fairview Hotel & Country Lodge. "We look forward to introducing hotel brands to the region that allow business and leisure travelers to enjoy great value." City Lodge`s entrance into the Kenyan market is its second expansion outside of South Africa, following its announcement earlier this year that it was developing a 106 room Town Lodge in Gaborone, the capital city of Botswana. This hotel is on track for completion in December. Currently, the group has 52 hotels in South Africa offering 6,440 rooms across the Courtyard, City Lodge, Town Lodge and Road Lodge brands. Its hotel under development in Gaborone and its stakes in the two Nairobi hotels will take its portfolio to 55 hotels with 6,750 rooms under management. "This investment into the Kenyan market comes after considerable examination and investigation and provides an excellent platform for our expansion in East Africa,` said Ross. "We continue to examine expansion opportunities in West Africa and in Southern African Development Community (SADC) countries." The transaction is below the transaction thresholds as set out in the JSE Listings Requirements and is therefore a voluntary announcement, for information purposes only. Bryanston 30 May 2012 Sponsor J.P. Morgan Equities Limited Date: 30/05/2012 07:05:08 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
