Sun International to reduce its reliance on Africa
The gaming and leisure giant, Sun International said the Palace of the Lost City at Sun City will not be sold to Minor International (MINT).
Casino and hotels operator Sun International, which recently was given green light to build a R3bn entertainment complex in Pretoria, aims to sell a portion of its interests in its African assets to a foreign subsidiary of Thailand-listed Minor International (MINT) for R664m.
The deal would enables Sun International to remain invested in the African assets but with responsibility for the casino component only‚ as well as to partner with Mint in other African opportunities that have a casino element.
With a market capitalisation of more than R43 billion ($4.1 billion), Mint is a global company focused on three primary businesses including hotels‚ restaurants and lifestyle brands distribution.
The mechanics of the deal sees MINT acquiring majority holdings in the Gaborone Sun in Botswana, the Kalahari Sands in Namibia, the Lesotho Sun and Maseru Sun as well as the Royal Swazi and Ezulwini Sun in Swaziland.
Sun will reduce its 100% stake in the Royal Livingstone and Zambezi Sun in Zambia to 50%, with MINT holding the balance.
Sun has, in recent years, preferred to focus on Latin American markets, where it already operates a casino in Chile and is in the process of setting up operations in Panama and Colombia.
Last month Sun announced its acquisition of Chilean gaming operator Monticello for R1.55bn ($146 million) 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.
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.
