Sun International will, through its Sun Latam subsidiary, increase its stake in the Sun Dreams hotel group, in Chile, to 65%.
Sun Latam and fellow Sun Dreams stakeholder Nueva Inversiones Pacifico, will each acquire 50% of EDS’s 19.3% equity interest in Sun Dreams. Pacifico will own 35% of Sun Dreams after the deal is concluded.
Sun International will pay $65.04-million for the additional stake it is buying.
The equity interests will be settled in cash, using funding to be secured from financial institutions in Chile.
Sun International said the deal eliminates the risks of having EDS and Pacifico exercising their put options against Sun International for their entire shareholdings in Sun Dreams, with the incumbent cash and debt consequences which these would entail for the group.