Resort hotel and casino destination chain Sun International, now carrying a lighter debt load after a large rights issue, reckons dividends could be resumed within two years. This week, Sun completed its R1.6bn rights issue, an exercise that saw a hefty oversubscription from shareholders. Total applications were close to R3bn. There has been debate about whether Sun, which had a total debt burden of about R15bn, was raising enough capital in the rights issue. The group forked out more than R1bn in interest in the year to end-December.

Sun has traditionally been a strong cash generator, but a major operational worry is the underwhelming trading at Sun’s new Time Square casino in Menlyn. To compound matters, casino groups might soon have to contend with a looming smoking ban, which could hinder gaming activities. Sun CEO Anthony Lemming said the rights issue would bring debt levels down to about three times ebitda (earnings before interest, tax, depreciation and amortisation). "...

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