Sun to pursue global growth with stake in Chilean firm
March 20, 2007
By AUDREY D’ANGELO
Cape Town - Sun International was going ahead with its plans for global expansion by taking a 40 percent stake in a multibillion-rand casino, sports and entertainment complex near Santiago, Chile, chief executive David Coutts-Trotter said yesterday.
He said the risks would be "significantly lower" than if his company had gone ahead with a similar development planned for the outskirts of Moscow, which had to be postponed because of a decision by the Russian government to allow casinos only in remote areas.
Coutts-Trotter said Chile was a stable country with a progressive government, good governance, strong economic prospects, and good tourism and investment potential. It was high in the ranking of countries with low rates of corruption and crime.
The investment of an undisclosed amount would be for a 40 percent stake in Chilean firm San Francisco Investment, which has an option to acquire the site and has been awarded the casino licence for 15 years. The deal, under which Sun International will benefit from long-term management and consultancy agreements, was subject to approval of the local regulator, the Superintendencia de Casino de Juego.
Coutts-Trotter said he was confident that this would be gained. "We have passed several probity checks in different countries," he explained.
The development will have a larger casino than Sun City. It will include a hotel with fewer rooms than Sun City, an amphitheatre, shops, entertainment amenities for families, bars and restaurants, and a tourist information centre.
It will be 50km from Santiago, with a 70km exclusivity zone. Its customers will come mainly from the cities of Santiago and Rancagua, with a total population of more than 6 million. The area is the industrial and financial centre of Chile, accounting for 45 percent of its gross domestic product. But the country is attracting a growing number of tourists.
Coutts-Trotter said Chile was similar to the Western Cape, with mountains, vineyards and a beautiful fjord coastline. He expected construction of the resort to start soon, with the casino scheduled to open next year.
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