Sun Nigeria exit closer

Sun International expects an investigation into a shareholder dispute at its Nigerian operation to be completed shortly, paving the way for the casino and hotel operator to finally exit that market, it said yesterday.

Sun International, which reported a 46% decline in half-year earnings hurt by subdued growth and one-off costs, bought a 49% stake in the Tourist Company of Nigeria (TCN) in 2006, becoming the largest single shareholder.

However, that deal has been disputed by some of the Ibru family, a fellow shareholder in TNC, which prompted various parties including Sun International and Nigeria’s Securities Exchange Commission (SEC) to appoint consultants Deloitte to investigate.

Sun International then said in 2016 it planned to exit Nigeria, where some other South African countries – including telecoms operator MTN – have faced problems doing business.

“Deloitte is expected to complete its investigation of the shareholder dispute shortly. Once the Deloitte investigation has been completed, it will pave the way for Sun International to exit its investment in Nigeria,” said Sun International.

The company also said the board of the TCN, which owns and operates the five-star Federal Palace Hotel in Lagos, had been reconstituted, with Nigeria’s SEC appointing two directors.

“The property is sought after given its location so there are potential buyers, but Nigeria has been volatile for a while. It starts becoming difficult for investors to have confidence,” said Sun International CEO Anthony Leeming.

Sun International reported diluted adjusted headline earnings per share of 105 cents for the six months to June 30, down from 198 cents in the same period last year, hit by a subdued trading environment in SA and Chile.

SA consumers, who contribute 69% to group income, are gambling less as high levels of indebtedness and a recent increase in VAT pressure disposable incomes.

“We have some positive performances such as Times Square [a casino in Pretoria] with some others not performing well. It’s going to a be a mixed bag but overall very sluggish growth for the rest of the year,” said Leeming. – Reuters

The property is sought after given its location so there are potential buyers, but Nigeria has been volatile for a while.

Anthony Leeming Sun International CEO