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South Africa's Sun International close to exiting Nigeria
(Recasts with Nigeria comment, CEO, details, background)
JOHANNESBURG, Sept 3 (Reuters) - South Africa's Sun
International expects an investigation into a shareholder
dispute at its Nigerian operation to be completed shortly,
paving the way for the casino and hotel operator to finally exit
that market, it said on Monday.
Sun International, which reported a 46 percent
decline in half-year earnings hurt by subdued growth and one-off
costs, bought a 49 percent stake in the Tourist Company of
Nigeria (TCN) in 2006, becoming the largest single shareholder.
However, that deal has been disputed by some of the Ibru
family, a fellow shareholder in TNC, which prompted various
parties including Sun International and Nigeria's Securities
Exchange Commission (SEC) to appoint consultants Deloitte to
Sun International then said in 2016 it planned to exit
Nigeria, where some other South African countries - including
telecoms operator MTN - have faced problems doing
"Deloitte is expected to complete its investigation of the
shareholder dispute shortly. Once the Deloitte investigation has
been completed, it will pave the way for Sun International to
exit its investment in Nigeria," Sun International said.
The company also said the board of the TCN, which owns and
operates the 5-star Federal Palace Hotel in Lagos, had been
reconstituted, with Nigeria's SEC appointing two directors.
"The property is sought after given its location so there
are potential buyers but Nigeria has been volatile for a while.
It starts becoming difficult for investors to have confidence,"
said Sun International Chief Executive Officer Anthony Leeming.
Sun International, which also has operations in Latin
America, reported diluted adjusted headline earnings per share
of 105 cents for the six months to June 30, down from 198 cents
in the same period last year, hit by one-off items and a subdued
trading environment in South Africa and Chile.
Consumers in South Africa, which contributes 69 percent to
group income, are gambling less as high levels of indebtedness
and a recent increase in VAT pressure disposable incomes.
"We have some positive performances such as Times Square (a
casino in Pretoria) with some other not performing well, It is
going to a be a mixed bag but overall very sluggish growth for
the rest of the year," said Leeming
One-off costs included 12 million rand ($813,000) of
restructuring costs related to the closure of the Sun Nao casino
In March, Sun International announced the closure of
loss-making operations, including the Sun Nao and the Fish River
Sun casino in South Africa, as well as its International VIP
Businesses in both South Africa and Panama.
At 0956 GMT, Sun International's shares were up 7 percent at
57.45 rand per share.
($1 = 14.7606 rand)
(Reporting by Patricia Aruo; Editing by Jason Neely and Mark
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