COMPANY COMMENT
Sun finds grass is not always greener abroad
The hotel, gaming and entertainment group’s forays abroad have been patchy, at best
Why Sun International persists with overseas acquisitions is something of a mystery at this stage in its debt cycle. To recap: the company has racked up R15bn in borrowings, most of them in SA, and needs to go to shareholders to raise capital. And yet, at the same time, it is completing a $27m purchase of Thunderbird Resorts in Peru, four gambling operations that it feels will strengthen its position in the country and diversify its Latin American base. This as it ramps up its shareholding in Sun Dreams from Chile’s EDS to 65%, from 55% at present. But it’s fair to argue that Sun International’s forays abroad have been patchy, at best. The company is now closing down an operation in Colombia, Sun Nao, where the cost of exiting a lease there is R50m. It’s given up on its high-rollers business in Panama and SA and downscaled the Ocean Sun Casino, also in Panama. And there’s that debt. A rights offer of R1.5bn will go only a small way to lightening the burden, while the argument that t...
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