HCI ‘to win’ in Tsogo unbundling

Tsogo Sun’s planned unbundling of its real estate unit is likely to be a boon to its parent, Hosken Consolidated Investments (HCI), analysts say. Tsogo said on Monday it would shift R23bn of mixed-use casino properties to its Hospitality Property Fund subsidiary as part of its plan to split into three separate units: hotels, gaming and property. After the transaction, Tsogo would hold 87% of Hospitality, but it wanted to ultimately unbundle those shares to investors, it said. With the addition of the seven properties, Hospitality’s portfolio would be worth about R36bn. The deal was being done primarily for the benefit of Tsogo’s parent, HCI, said Avior Capital Markets analyst Janine van Wyk. HCI would end up with about 44% in Hospitality if Tsogo went ahead with its plan to unbundle that asset to its shareholders, she said. "The deal will relay cash flows from Tsogo in order to ultimately increase cash flows directly to the dividend-hungry HCI, which has been outspoken about wanting...