The gaming assets held are in GrandWest casino, Carnival City casino, Sibaya casino and the BoardWalk casino, together with the investments held in the National Management Company and the Gauteng Resort Manco (which companies derive management fees from the four operating casino companies).
"These assets are arguably the best portfolio of casino investments available in South Africa, and potentially the pick of Sun International's portfolio of casino investments," RAH said, adding that it felt that Sun International's offer undervalued the company.
RAH announced on Monday that the acquisition of an additional economic interest in Emfuleni Resorts (Proprietary) Limited had been finalised and further progress had been made in implementing the disposal of its indirect interest in Oceana Group Limited.
It said the Eastern Cape Gambling and Betting Board had approved the acquisition by Afrisun Leisure Investments (Proprietary) Limited (Afrisun) (RAH"s subsidiary) of a 34.9% interest in Zonwabise Resort Holdings Limited.
Zonwabise holds, as its principal assets, a 20.25% economic interest in Emfuleni, which in turn owns the Boardwalk Casino and Entertainment World and a 50% interest in Emfuleni Casino Manco (Proprietary) Limited (Emfuleni Manco).
The 46.2 million rand purchase price is being funded through the issue of redeemable preference shares at a coupon rate equal to 68.5% of the prime overdraft lending rate. Dividends of 3.3 million have already been received and thus the investment has been acquired at a dividend yield of 7.25%.
The effect of this acquisition is to, inter alia, increase RAH's attributable economic interest in Emfuleni from 2.3% to 7.0% and in Emfuleni Manco from 10.9% to 22.5%.
I-Net Bridge
Publisher: I-Net Bridge
Source: I-Net Bridge
