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Sun International’s Stunning Nkandla Deal

Sun International’s Stunning Nkandla Deal

Apr 2015

Words Ken Quero

Sun International has been on the prowl, and in March of this year announced the acquisition of casino resort group Peermont for a staggering R9.4 billion. The jewel in the crown is the iconic Emperor’s Palace, one of the largest casino hotels in Africa. According to Sun International’s chief executive Graeme Stephens, this will significantly expand its South African portfolio. 

But it seems that this is just the beginning. Sun International may be in the final throes of closing a second deal. 

According to a confidential dossier that was recently left behind on the Gautrain, senior officials in the Department of Treasury have become increasingly concerned with the controversy surrounding the development of the presidential compound at Nkandla. South Africa has faced a number of headwinds in recent years. Internationally, the International Monetary Fund recently called for extensive reforms in the country, and both Fitch and Moody’s have downgraded South African sovereign rating in the last six months.

On the domestic front, opposition parties have been in a state of frenzy over the matter, and even COSATU, ANC veterans, and party stalwarts like Ben Turok have been critical of the state of affairs. According to DA Parliamentary Leader, Mmusi Maimane, the amount of taxpayers’ money spent on non-security upgrades to the Zuma compound is in excess of R52 million, and just about the only thing the DA, the Freedom Front and the EFF can agree on is that this amount – at least – must be repaid. 

We can only speculate that the presidency ultimately succumbed to this barrage of pressure, and have to admit that the solution is rather elegant. According to the dossier, which is now in the hands of the Train and Truck Drivers Union of South Africa (TT), final contracts are being drawn up for the sale of Nkandla to Sun International. Our source would not comment on the price, but hinted that it could be in the mid-9-figures, which would net a cool return of around 100%.

Sun International CEO Graeme Stephens would not comment on plans for Nkandla but did say that ‘While the Peermont portfolio of assets will initially increase the proportion of the combined business that arises in Southern Africa, it also opens the possibility of further restructuring of local assets, with a medium term objective of creating a portfolio of fewer assets of a higher quality.’ It is clear that a significant KwaZulu-Natal acquisition would round off the group’s African portfolio quite nicely, as the province has long been the one gaping hole in their portfolio.

Separate to the above, but clearly inspired by this development, we have learnt that the Department of Environmental Affairs is using the deal as a catalyst to clean up an issue that has been a thorn in its side for a considerable time. Sources close the department confirmed that as of the end of 2015, any and all hunting of predators that were bred in captivity will be outlawed. This calls to an end the abysmal practice of ‘canned hunting’, that has horrified conservationists both locally and abroad. 

According to an early draft of the white paper that will be presented to parliament at its next sitting, all such animals that exist in captivity at the time of January 2016 will be confiscated and released in the Emakhosini Ophate Heritage Park. This park, which lies exactly midway between Nkandla, and its more famous sibling, the Hluhluwe-iMfolozi Game Reserve, has been crying out for attention for years, and is finally getting the injection it so desperately needs. 

Recognising the importance of ethical hunting as a key pillar of growing the tourism industry in South Africa, Emakhosini Ophate will apparently be set aside exclusively for hunting. Says a source close to the department: ‘While we object to the abuse of animals in captivity, the hunting of free roaming animals is the purest of sport, and will form a key pillar in our attempts to attract more foreign tourists to our beautiful country’. In an interesting twist, anonymous sources claim that the first five years’ worth of hunting quota of five lions has been allocated to Sun International as well… and the stay, spray and pray package will be called “This Poker Face ain’t Lion to You”.

Nightjar Travel