The Board of Directors of Sun International announce that definitive agreements have been concluded between Sun International and the holders of ordinary shares, preference shares and mezzanine debt in the Peermont Group in terms of which Sun International, through its wholly owned subsidiary, Sun International (South Africa) Limited, will acquire 100% of the Peermont Group. Peermont operates a portfolio of gaming and hospitality businesses in South Africa and Botswana, owning nine casino resorts, including its flagship Emperors Palace casino resort, three stand-alone hotels and one stand-alone casino.
Through this transaction, Sun International gains the iconic 667 roomed Emperor Palace in Kempton Park, the four star Mmabatho Palms in Mafikeng, Graceland in buoyant Secunda, and other assets spread across South Africa. In Botswana where Peermont had built a strong foothold in the major metros with the 337 roomed Grand Palm and four star Mondior hotel in Gaborone as well as Sedibeng Casino in Francistown complimented by the modest three star Metcourt Lodge in Francistown.
Sun International says the proposed transaction is aligned to Sun International’s strategy to enhance and leverage its existing asset portfolio and to seek new growth opportunities. The parties have also reached a settlement regarding Sun International’s proposed relocation of its Morula licence from the current site in Mabopane to Menlyn, Tshwane. The settlement paves the way for Sun International to commence planning and construction of the R3 billion development to be known as Time Square at Menlyn Maine.
Menlyn Maine is anticipated to generate EBITDA of R600 million and management fees of R95 million, a significant increase from the Morula EBITDA of R16 million and management fees of R7 million, as at 30 June 2014. Sun International, through group companies, will hold an effective 74.9% of Menlyn Maine and will have the management contract.
