Why the decks are stacked against Sun International
The hotel and gaming group launched by Sol Kerzner has been going through tough times for some years now. The situation has been made worse not so much by bad luck as by bad decisions and gambles that have not paid off
Sun International, the iconic gaming and hotel group, is dicing with debt in a high-risk game where its rivals are watching closely — with their cards clutched to their chests. There are huge stakes at play in a highly competitive gaming sector where casinos are now battling to compete with fast-growing electronic bingo terminals, limited payout machines and sports betting. The odds, at this delicate juncture, are much stacked against Sun, which has just launched a R1.5bn rights issue to ease some of its hefty debt load. It’s perhaps the lowest point for a company that shot to international attention when a then 44-year-old hustler named Sol Kerzner opened the glitzy Sun City in 1979, at a cost of R35m. Kerzner wasn’t exactly a novice: he’d already opened SA’s first five-star hotel, the Beverly Hills, in Umhlanga in 1964 despite much scepticism. But Kerzner threw big money at Sun City, wooing the world’s top golfers with the promise of the first US$1m prize, and offering similar che...
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