Sunday, 4 January 2015

Swaziland: Ezulwini Sun Hotel takeover

Takeover of defunct Ezulwini Sun Hotel process is underway with negotiations having reached advanced stages with a global hotelier partner.
Tibiyo Taka Ngwane Managing Director Absalom Themba Dlamini would rather not divulge the levels of shareholding involved in the business deal with Minor International Public Company but only confirmed that it was a matter of a work-in-progress that would be concluded soon, he also did not wish to discuss timeframes.

The net purchase price of the two hotels, Ezulwini Sun and Royal Swazi Sun as estimated at E644m plus the face value of any shareholder loans on the closing date. It was further reported that this is the only African operation which Sun International would have an interest (excluding its South African operations) and which does not currently form part of the proposed transaction, was its investment in the Tourist Company of Nigeria, the owners of Federal Palace in Lagos.
However it was reported in August 2014 that the investment by Minor International would be a combination of an acquisition of existing shares from the relevant Sun International subsidiaries which entailed the acquisition of an interest in the operating management agreements, whereby Sun International management provided management and related services in respect of each of the African assets.
It was further reported that “the assets involved include the Gaborone Sun in Botswana, the Kalahari Sands in Namibia, the Lesotho Sun and Maseru Sun in Lesotho, the Royal Swazi and Ezulwini Sun in Swaziland and the Royal Livingstone and Zambezi Sun in Zambia.
Sun International will continue managing the casino operations situated at each of the African assets and mint will assume day-to-day management responsibility for the hotel operations other than Zambia, which will be jointly managed under a joint venture arrangement.”
In the same month the company announced that Minor International Pcl (“MINT”) and Sun International Limited (“Sun International”) that terms had been agreed whereby: (i) Sun International is disposing a significant portion of its shareholdings and interest in its Botswana,
Lesotho, Namibia, Swaziland and Zambia operations, consisting of eight properties (“African Assets”) to MINT for a total consideration of R679.5 million (USD 63.9 million), and (ii) Sun International and MINT are forming a new strategic partnership to own and operate the African Assets going forward (“partnership”).

The partnership intends to leverage both companies’ core strengths where Sun International will continue to manage the casino operations, while MINT will assume the hotel management, marketing and distribution under MINT’s Anantara and AVANI brands.

Sun International will dispose of 50% of its interest in Zambia, and 80% of its interests in Botswana, Namibia, Lesotho, and Swaziland. As a result, MINT’s effective shareholding will be (1) 50% in Zambia properties, which include 173-room Royal Livingstone and 212-room Zambezi Sun, (2) 64% in 196-room Gaborone Sun in Botswana, (3) 80% in 173-room Kalahari Sands in Namibia, (4) 37.5% in Lesotho properties, which include 158-room Lesotho Sun and 105-room Maseru Sun, and (5) 40.5% in Swaziland properties, which are 149-room Royal Swazi and 202-room Ezulwini Sun.

The proposed transaction and the partnership with MINT in Africa are in line with Sun International’s strategy to optimize its capital allocation and resources. The Partnership enables Sun International to remain invested in the African Assets but with responsibility for the casino component only, as well as to partner with MINT in other African opportunities that have a casino element. Going forward Sun International will be able to give greater focus to opportunities identified in Latin America and Asia (where MINT has a strong presence) as further key growth markets for its core casino business.
In addition, MINT will commit its pro rata share of new capital expenditure to realise the revenue potential of the African Assets, thus giving Sun International more room to consider capital investment opportunities elsewhere. Sun International will use proceeds from the
disposal to reduce its debt and provide capacity for its strategic expansion initiatives.
The proposed transaction allows MINT to invest and operate in Botswana, Lesotho, Namibia, Swaziland and Zambia, where MINT believes in secular demand growth for quality accommodation. In addition, MINT will bring its hospitality expertise, together with operational and distribution capabilities, to capture the growth potential of the African Assets.
The proposed transaction also fits with MINT’s expansion plans in Africa, where MINT currently owns eight luxury game lodges and resorts in Kenya and Tanzania under the Elewana Collection, and five hotel projects in Mozambique under MINT’s Anantara and AVANI brands.

About Minor International

Mint is a global company focused on three primary businesses including hotels, restaurants and lifestyle brand distribution.
The shares of MINT are listed on the Thailand Stock Exchange. Its current market capitalisation is Thai Baht 132 billion (in excess of USD4.1 billion).
In 2013 MINT generated in excess of US$1.1 billion in revenues and net profit of over US$130 million.
MINT is a hotel owner, operator and investor with a portfolio of 110 hotels and serviced suites under the Anantara, AVANI, Oaks, Per AQUUM, Elewana, Four Seasons, St. Regis, Marriott, Radisson Blu and Minor International brands in Thailand, Australia, New Zealand, Maldives, Vietnam, the Middle East, Sri Lanka, China, Malaysia, Indonesia, Cambodia, Tanzania, Kenya, and Mozambique.
MINT is also one of Asia’s largest restaurant companies with over 1 500 outlets operating system-wide in 20 countries under The Pizza Company, Swensen’s, Sizzler, Dairy Queen, Burger King, Thai Express, The Coffee Club, Ribs and Rumps and Riverside brands. MINT is one of Thailand’s largest distributors of lifestyle brands focusing primarily on fashion, cosmetics and contract manufacturing.
Its brands include Gap, Esprit, Bossini, Charles & Keith, Pedro, Red Earth, Tumi, Zwilling J.A. Henckels, ETL Learning and Mysale.

About Sun International

Sun International is a leading hotel, resort and gaming company focused on the development, management and operation of hotels, resorts and casinos in South Africa, other parts of Africa and Latin America.
Sun International is listed on the JSE Limited and is invested in and manages a portfolio of hotel and casino properties valued at USD2.3 billion. The Sun International Group has a diverse portfolio of assets including modern and well located casinos, some of the world’s premier resorts and world class five star hotels, including iconic properties such as The Royal Livingstone Hotel at Victoria Falls, The Palace of the Lost City at Sun City (Sun International’s flagship integrated resort) and The Table Bay Hotel in Cape Town.
Sun International has leveraged off its strong presence in Africa to expand internationally.
The Group successfully extended operations into Latin America with initial operations in Chile and new casino operations to be opened shortly in Panama. The Group is actively pursuing further expansion opportunities within Latin America and Asia.