Sun shines for hotel group with new Peruvian deal

JSE-LISTED hotel and gaming group Sun International has entered into a share purchase agreement with Thunderbird Resorts and Casinos Peruanos to acquire 100 percent of various Peruvian companies that operate four gambling operations in Peru for $26 million (R352.82m).

The company said the deal, which would be made through its subsidiary Sun Dreams SA, also include immovable property worth $10m.

It said four gambling operations owned by Thunderbird and Casinos Peruanos would be responsible for operating casinos, restaurants, slot machines and other gaming and leisure and entertainment-related businesses throughout Peru.

“The immovable property which Sun Dreams intends purchasing is the property on which the Fiesta Casino is located in Lima, Peru,” the group said.

Sun International had made it known that it wanted to grow its portfolio beyond the South African borders and it has publicly declared its intentions of growing its gaming and hospitality businesses in Latin America.

During the interim results last week, the group said the acquisition presented an opportunity for Sun Dreams to strengthen its position in the Peru market and diversify its asset base in Latin America.

The group said the transaction would be settled in cash, utilising Sun Dreams’ cash reserves. It said the acquisition remained subject to regulatory approvals in Peru, including but not limited to the relevant gambling board approvals. Sun International said the proposed acquisition was classified as a Category 2 transaction which meant it fell outside the JSE listings requirements of seeking shareholder approval.

The book net asset value of the assets to be acquired by Sun Dreams amounted to $9.1m for the six months to end-June.

The assets also generated a net profit after tax of $768 000 including finance charges of $289 000 while earnings before interest, tax, depreciation and amortisation (Ebitda) was $4.2m

Sun International has presence in that region already with stakes in casino gaming in Chile, and it developed the Ocean Sun Casino in Panama and the Sun Nao casino in Colombia to bulk up international operations.

In the results for the six months to end-June published by Sun International last week, it reported 19 percent increase in revenue to R7.6bn, up from R6.4bn, with the growth attributable to the inclusion of Sun Dreams and Sun Slots in June last year and Time Square in April this year.

But revenue generated by the South African operations, excluding alternative gaming, international business, Time Square and Morula, fell 1.9 percent with consumers affected by the economic slowdown.

Sun International shares rose 3.75 percent on the JSE yesterday to close at R52.50.