By Promit Mukherjee
JOHANNESBURG (Reuters) – South Africa’s biggest casino operator Tsogo Sun Gaming has increased its stake in City Lodge to 10%, it said on Thursday, making it the second biggest shareholder in the leading hotel chain.
Reuters had reported on Wednesday the company, through its HSS Investments and Entertainment Holdings subsidiaries, had been buying City Lodge shares since January, part of a plan to re-enter the hotel business which it left in 2019.
“Tsogo Sun has taken up an approximate 10% shareholding in City Lodge,” the company said in a statement, noting it had paid 136 million rand ($7.43 million) through subsidiaries that it did not name.
City Lodge, in a separate statement, said Entertainment Holdings and HSS Investments “in aggregate, increased their collective interest in the securities of the company … to 10.0%.”
Tsogo Sun, which runs the sprawling entertainment hub and casino Montecasino in Johannesburg, in 2019 divested its hotel business which was then bundled into Southern Sun, a hospitality chain in Africa, the Seychelles and Middle East.
On Thursday Tsogo Sun said it has allocated additional cash for the year ending March 2024 to invest in the hospitality sector, pay dividends and reduce debt.
Tsogo Sun shares on the Johannesburg Stock Exchange closed down 1.68% while City Lodge ended up 5.27%, as the broader index closed up 0.73%.
($1 = 18.3161 rand)
(Reporting by Promit Mukherjee; Editing by Richard Chang)
