South African casino operator Tsogo Sun is reshuffling its pack by selling seven of its casino and hotel businesses to Hospitality Property Fund (HPF) in a shares-and-subscription deal worth R23bn.
The deal will see Tsogo Sun own around 87 per cent of the shares in Hospitality Property Fund.
The board said the move was in line with its strategy to restructure Tsogo Sun into three distinct operating divisions for property, gaming and hotels.
It said: “The board anticipates that the separation of Tsogo Sun into these three focused divisions – and separate listed entities – will unlock value and provide greater investment choice for Tsogo Sun shareholders. On conclusion of the transaction, Hospitality is expected to own investment properties with a total fair market value of about R36bn. It is Tsogo’s ultimate intention to unbundle their shareholding in Hospitality to its shareholders and has warranted to Hospitality to do so at a time and in a manner that does not have any adverse consequences to Hospitality,” it said.
Tsogo delivered stable results for its full year in May with income for the year of R14bn up six per cent with a six per cent growth in net gaming win assisted by a nine per cent growth in food and beverage revenue as well as strong growth in property rental income. revealed earlier this year that its investment spending in the year to March had declined to about R3.25bn.
As well as the R1.6bn redevelopment of the Suncoast Casino in Durban and the potential to bid for the relocation of one of the smaller casinos in the Western Cape to the Cape Metropole, Tsogo’s Chief Executive Jacques Booysen also mooted further expansion into Africa, with plans to open a Garden Court in Zambia, and a Southern Sun Hotel in Ghana.