Boko Haram insurgence a problem
South African casino and hotel operator Sun International Ltd. has announced it will exit the Nigerian market due to a drop in earnings. Among the contributing factors were a weakening economy, a dispute with the company’s local partners, and an Islamist insurgency led by the militant Boko Haram group, reported GGRAsia.
Sun International, owner of the Sun City resort near Johannesburg, bought 49 percent of the Tourist Company of Nigeria in 2006. That gave it part-ownership of the Federal Palace hotel in Lagos, where EBITDA crashed 58 percent in the 12 months through June, Sun said in an earnings statement. Occupancy rates at the property fell to 42 percent.
Complicating matters, Sun is in the midst of a “long-standing family dispute” with shareholders after workers including South African expatriates were detained without charges by Nigeria’s Economic and Financial Crime Commission.
The hotelier said in May it plans to sell minority interests in properties in countries including Zambia, Botswana and Namibia for 394 million rand (US$29 million) to reduce debt.
Other South African companies have also left Nigeria, include retailers Woolworths Holdings Ltd. and Truworths International Ltd.
