File image: Sun International. (IOL).

CAPE TOWN - Hotel and casino group, Sun International is reportedly drowning in debt and on Tuesday said that it wants to sell 25.9 million shares in order to raise R1.5 billion to repay its debt. 

The group said it wants to offer these shares in a rights offer, reports Moneyweb. 

The shares will be R57.82 per rights offer share in the ratio of 25.34 rights offer shares for every 100 existing Sun International shares which were held on May 18, 2018. 

The group said that the proceeds will be used to repay their debt which will in turn allow for space for debt agreements to take place. 

In addition, Sun International reportedly said that Value Capital Partners would partly support the rights offer up to R750 million. 

In March, the group said that it had closed down operations, that were not making any money in South Africa, Colombia and, Panama, in a bid to focus on reducing its debt. 

Sun International had diversified into new markets, most notably in Latin America, beginning in Chile 10 years ago. It was hoped this would offset slow growth in the South African market.

But with the immediate need to reduce debt, Sun International announced the closure of the Fish River Sun resort near Port Alfred, Sun Nao Casino in ­Colombia and the International VIP Business in South Africa and Panama.

Sun International chief executive Anthony Leeming said the group had closed the Fish River Sun in November, following land claims on the property.

He said the group would also downscale the Ocean Sun Casino in ­Panama by cutting staff numbers.

Leeming said the company had also applied to the Eastern Cape Gaming Board to restructure the Boardwalk Casino in Port Elizabeth.

Sun International said it would address performance problems at Carousel Casino in the North West and Naledi Sun Hotel and Casino in the Free State.

De Wet Schutte, an analyst at Avior Capital Markets, yesterday said that the move to close some of the businesses was expected.

READ MORE: Sun group’s downscaling move ‘expected’

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- BUSINESS REPORT ONLINE