Iconic Zimbali resort on KZN North Coast in business rescue

In yet another blow for the struggling tourism industry, the iconic five-star Zimbali resort hotel on the KZN North Coast near Ballito has gone into business rescue.

Known formally as the Fairmont Zimbali Resort and owned by Kuwait-based IFA Hotels & Resorts, management made the announcement this week – ironically just as the SA government was easing restrictions on travel and tourism.

Business rescue is not business closure

As South Africans will have seen with airlines such as Comair and SAA, for example, business rescue does not necessarily mean closure of the business.

Rather, it involves the appointment of a business rescue practitioner who will work with stakeholders to hopefully devise a viable way out of financial distress.

The hotel lies within the bigger Zimbali Coastal Resort estate and was opened in 2010 in the build up to the Fifa World Cup.

Strong revenue growth prior to lockdown

In the few months before lockdown, the property enjoyed strong growth and a record turnover between November 2019 and March 2020.

“The consequent stagnation in global economic activity together with the South African government-imposed national state of disaster has affected negatively on our business,” said General Manager Wayne Krambeck in statement published by Times Live.

 “We have been in support of our president and the government’s reasons for implementing the initial lockdown. However, the extraordinary circumstances of a prolonged lockdown, now in day 176 – the longest in the world to date with limited support from government – has eroded our revenue base.”

The parent company has appointed Pierre Berrange as the business rescue practitioner and all processes will now proceed in accordance with the Companies Act.