Sun International Limited, led by South African entrepreneur Anthony Leeming, has agreed to sell its Nigerian holdings to Rutam Finance Company Limited (RFC) for approximately R275 million ($14.4 million).
The move is part of Sun International’s strategy of consolidating operations and focusing on core markets. Sun International entered the Nigerian market in 2009, but has struggled in recent years due to the harsh operating environment. This divestiture aligns with the company’s strategic objectives and marks a shift in portfolio management.
Sun International, chaired by Anthony Leeming, will sell 43.3 percent of its stake in Tourist Company of Nigeria PLC (TCN), which administers Lagos’ Federal Palace Hotel, to RFC for $1.875 million.
In addition, the group would repay its entire $12.675 million credit to RFC, thereby departing the Nigerian market. In addition, the firm plans to sell its remaining 6% stake in TCN in the future.
Sun International is expected to receive approximately R275 million ($14.41 million) in cash from the acquisition, subject to typical closing conditions such as regulatory approvals. These monies will be used to reduce debt.
TCN will no longer appear on Sun International’s financial statements after the deal is completed. This will lower total group debt by approximately R800 million ($41.82 million), excluding IFRS 16 lease liabilities.
The closure date is set for no later than May 28, 2024, assuming that all regular closing requirements are met. The Nigerian Competition Authority, the Securities and Exchange Commission, and the Nigerian Stock Exchange have all issued key clearances.
Sun International, founded in 1968 by the late Sol Kerzner, has evolved into a well-known gaming and resort corporation under Leeming’s leadership. In fiscal 2023, the company’s revenue increased by 7% to R12.10 billion ($646.14 million), while headline earnings rose by 86% to R1.04 billion ($55.35 million).
This highlights Sun International’s resilience and strategic direction. Sun International’s exit from Nigeria illustrates the company’s commitment to simplifying its portfolio and seeking new opportunities in critical markets.
With a rich history and an eye toward the future, this transaction illustrates the company’s dedication to creating wealth for shareholders and stakeholders while also increasing its position in the gaming and hotel industries.
