Sun International cuts African interestsComment on this story
Sun International would dispose of a significant portion of its interests in its African assets to the biggest hospitality firm in Asia Pacific, Minor International Public Company (Mint), for R664 million, the JSE-listed hotel and casino operator said yesterday.
The deal would enable it to optimise its capital allocation and resources and focus on the casino element of the business in its African operations.
Sun International would remain a minority shareholder and partner in the African operations, other than Zambia, where it would still retain its 50 percent interest.
African operations affected by the deal announced yesterday include the Gaborone Sun, Kalahari Sands, Royal Swazi Sun and Ezulwini Sun. Its Zambian operations are The Royal Livingstone and Zambezi Sun.
Sun International said the proceeds would be used to reduce debt and to help identify more growth opportunities in Latin America and Asia in line with its strategy.
Last month Sun International announced its acquisition of Chilean gaming operator Monticello for $146 million (R1.55bn) as part of plans to increase its footprint in Latin American countries.
The hotel operator said it would continue to manage the casino operations situated at the African hotels, while Mint assumed the day-to-day management responsibility for the hotel operations. This arrangement would exclude the Zambian operations, which would be managed as a joint venture by the two groups.
Mint would also commit to invest in operations that required refurbishments in the short to medium term.
At the completion of the transaction, Sun International will hold interests of 20 percent or less in each of these hotels and resorts. The transaction excludes the South African operations, as well as Sun International’s investments in the Tourism Company of Nigeria.
“Given that Mint does not operate nor manage casinos, there is the basis for a… partnership of complementary skills strategy,” the company said.
The transaction would provide an opportunity for the group to create a strategic alliance with a leading international hospitality and leisure operator that had hotel management and marketing expertise, as well as an ability and desire to invest in the assets under management, the group said.
Mint is a global company and listed on the Stock Exchange of Thailand with a market capitalisation of more than $4.1 billion. Last year Mint generated more than $1.1bn in revenue and a net profit of over $130m. It has a portfolio of 110 hotels in south-east Asia, Australasia and the Middle East.
Sun International leapt 3.05 percent to R118.