SOUTH AFRICA – Gaming and hospitality group, Sun International, wants to exit Nigeria over a shareholder dispute in Tourist Company of Nigeria (TCN).
TCN owns and operates the five-star Federal Palace Hotel in Lagos where Sun International bought a 49% interest in 2006.
Sun International has said that it would proceed with a plan to sell its investment in Nigeria and that it has received a number of offers for TCN stake
Sun International wanted to exit TCN after a dispute with a fellow shareholder in TNC, the Ibru family. The Ibru family wants to remove the company’s chair, Goodie Ibru.
The dispute prompted various parties including Sun International and Nigeria’s Securities Exchange Commission (SEC) to appoint Deloitte to investigate, reported Business Live.
“We understand the Deloitte investigation has been completed with the report having been delivered to the SEC of Nigeria.”
“We have received a number of unsolicited offers from third parties expressing an interest to acquire our shareholding and outstanding loan amount in TCN,” Sun International said in its results for the six months ended June 30.
The Federal Palace Hotel underperformed in the six months underperformed incurring a $200,000 (R3m) loss. The loss was due to adjusted earnings before interest, tax, depreciation and amortisation (ebitda) loss.
Sun international said it is waiting for the resolution of Sec investigation in order to start with formal disposal process.
“Trading for the period was volatile with a difficult start to the year following the December hailstorm. Trading improved in May and June. However, the outlook remains uncertain.”
“Occupancy for the period was at 61%, down 10% on the prior year with the average room rate down 2%, to R1 807 ($119.36).” Sun International reported.
“We will shortly commence with a comprehensive review of Sun City’s operations to achieve operational efficiency and to enhance the guest experience,” Sun International added.
The company’s representative said that the company did not expect trading conditions to improve in the short term because of the subdued economic conditions in SA and the uncertain international environment.