Tsogo to unbundle hotels


Tsogo to unbundle hotels


Published Date: 2019-03-18 | Source: Stephen Gunnion | Author: Stephen Gunnion

Tsogo to unbundle hotels

Tsogo said the separate listing would improve disclosure and allow for a valuation that is not discounted for gaming-related regulatory risks.

Tsogo Sun plans to unbundle and list its hotels business and distribute it to shareholders in a move it says will give them greater investment choice and the ability to better manage their exposure to gaming and hotels.

It will change its name to Tsogo Sun Gaming and will retain its casino and alternative gaming operations. The newly-listed Tsogo Sun Hotels will continue to own, lease and manage its hotels in SA as well as several other sub-Saharan African countries, Seychelles and Abu Dhabi. It will also hold the group's minority investments in UK-based RBH Hospitality Management and International Hotel Properties. Tsogo Sun Gaming will retain and consolidate its 59.2% interest in Hospitality Property Fund (HPF).

Last year, the group cancelled plans to dispose of its seven mixed-use casino properties to HPF and unbundle its stake in the fund to shareholders after it failed to garner enough support. The proposed moved was also aimed at splitting the hotels, property and gaming assets.

Tsogo said the separate listing of its hotels business would improve disclosure of the division and allow for a valuation that is not discounted for gaming-related regulatory risks.

The two groups will enter a shared service agreement to ensure that the separation of the gaming and hotels division doesn't result in the duplication of central costs.

It expects to release the pre-listing statement for Tsogo Sun Hotels on or about 22 May, with the listing expected to occur about three weeks later. Following that, CEO Jacques Booysen plans to retire at the end of June. He'll be replaced by chief operations officer Chris du Toit, who is also the CEO of its Galaxy Bingo business. Former CEO Marcel von Aulock, who left in 2017, will return as CEO of Tsogo Sun Hotels.

Its shares gained 2.5% to R21.02 on Friday.


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