Sun International share slumps on warning of loss after Peermont deal fails
Sun International's share price fell as much as 6% to R86.75 on Wednesday, 17 August, after it warned shareholders it expected to report a loss for the year to end-June.
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The hotel and casino group said it expected to report on August 22 that it fell into a headline loss per share (HEPS) of between R3.70 and R4.20 from the prior year's headline earnings of R6.29.
Reasons for the loss included the costs involved in abandoning its proposed acquisition of Peermont after the deal failed to get Competition Commission approval in December.
The deal included a clause requiring Sun International's subsidiary, Time Square Casino Menlyn Maine, to pay Peermont between R700m and R900m if the deal lapsed.
Wednesday's trading update said Times Square's settlement with Peermont came to R748m, of which R579m was attributable to Sun International.
Sun International paid an additional R243m for the casino it acquired in Chile in 2014, Monticello, after it achieved agreed earnings targets.
The results will also include an unrealised forex loss of R207m, of which R102m is attributed to Sun International, on dollar-denominated shareholder loans owed by its Federal Palace property in Nigeria.
The group said it had also suffered from interest rates rising in SA and the decline of the rand against the dollar.
Source: BDpro
Source: I-Net Bridge
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