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Sun International to Sell 43% Stake in Tourist Co of Nigeria

Sun International Limited, a South African hospitality group, has unveiled its intention to sell 43% of its shares in Tourist Company of Nigeria Plc, the entity that owns and operates the renowned Federal Palace Hotel and Casino. The decision comes as Sun International looks to divest a significant portion of its stake to Rutam Finance Company, an associate of Oma Investments Limited, an existing shareholder in Tourist Company of Nigeria Plc.

Lovelyn Aniekwe, TCN’s Company Secretary, confirmed that the hotel’s board held a meeting on April 3, 2024, to discuss Sun International Limited’s offer. Aniekwe stated, “The Board convened an emergency meeting on April 3, 2024, to consider the notice from Sun International Limited and noted the offer.”

It was also revealed that Rutam Finance Company had extended similar offers to other significant shareholders, and all parties involved had adhered to the pre-emption provisions outlined in the shareholders’ agreements. The board expressed optimism that the offer from Rutam Finance Company, along with ongoing arrangements among shareholders, would present an opportunity to address existing challenges and positively impact the company’s future.

In compliance with Rule 17.18, Part II of the Rulebook of Nigerian Exchange Limited, Tourist Company of Nigeria Plc entered a closed period on January 1, 2024, in preparation for filing its audited financial statements for the year ending December 31, 2023. The closed period will conclude twenty-four hours after the completion of the sale transactions, the transfer of shares to RFC Limited on the trading floor, and the notification of completion provided to the Nigerian Exchange Limited. At that point, the company’s outstanding financial statements will be released to the public.

Upon completion of the transaction, Sun International Limited’s sale of 43% of its shareholding equates to a transfer of a 21.2% stake in the Federal Palace Hotel to Rutam Finance Company. Prior to this deal, Oma Investments Limited held an 18.1% shareholding in the hotel.

While Sun International Limited will retain its position as the majority shareholder, the combined shareholding of Rutam Finance Company and Oma Investments Limited will amount to 39.3%. Additionally, Oma Investments Limited, through its ownership of Ikeja Hotels Plc, holds a 12.2% shareholding in Tourist Company of Nigeria (Federal Palace).

It is worth noting that Oma Investments Limited acquired a 25.89% shareholding in Ikeja Hotels Plc in 2018, which has since increased to 26.19%.

In the fiscal year 2023, Federal Palace Hotel experienced a continuation of losses, with a loss after tax of N31.67 billion, marking an 89.6% decline from the previous year’s net loss of N3.21 billion. The group’s losses were primarily driven by a net foreign exchange loss of N30.26 billion. As a result of these financial challenges, Federal Palace Hotel closed 2023 with negative equity of N7.78 billion.

The sale of shares by Sun International Limited signifies a significant development in the ownership structure of Tourist Company of Nigeria and the Federal Palace Hotel and Casino.

Aniedi Ekwere
Aniedi Ekwere
Author/Consultant Find More Africa/AA Advisory, We provide betting reviews, thought leadership articles in the emerging markets, business development on products/ platforms in Africa with solid networking relationships with gaming operators in Africa, and Expertise in PR and marketing communication, and iGaming Consulting Services.

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