The terms of a new loan worth US$150m through Banco de Chile Banks, the BCI, Banco Estado, and the BBVA have been accepted by Sun Dreams in keeping with its plan to expand its footprint in Latin America, according to G3 Newswire.
The expansion into Latin America is part of the merger process of South African hotel and casino operator Sun International (JSE: SUI) with Chilean counterpart Dreams. The loan’s purpose is to aid the company in refinancing existing financial liabilities and to extend the term of its debt to 10 years from 4 and free-up collateral. In doing so, the merged company’s financial structure will be strengthened enabling it to adequately address future projects it is currently considering in its business plan.
In June, the Panamanian Gaming Control Board finalized the merger after receiving approval from Chile’s Gaming Board in May. Johannesburg-based Sun International’s Latin American operations include the Ocean Sun Casino in Panama City, Monticello in Chile, and a project in Colombia that is nearing completion. The deal will merge those operations and by doing so will expand its presence in the region.
Sun and Dreams announced in May plans of a US300m investment in Latin America with the lion’s share to be invested in Peru, according to Claudio Teesside, Dreams corporate finance manager, as reported by the news agency. In an interview with local newspaper Diario Financiero, Teesside said that the company’s three primary markets will be Peru, Brazil, and Chile, with Peru being the main focus in the near future due to uncertainties in the markets of the other two, according to the report.
It is also believed that Sun Dreams will be participating in the upcoming tender process for the Chilean licenses and is close to opening a new casino in Panama. The merged company operates six casinos in Chile and recently has expanded its footprint in Peru where its properties include the prestigious Casino New York in Lima as well as four smaller gaming establishments nearby. According to local news reports, Sun Dreams is also looking to expand in the capital where it is evaluating the possibility of a new integrated gaming complex and entertainment center for the capital which would include a convention center. The investment is estimated at approximately US$250m.
In total, the new company will have 13 properties spanning four countries with a total of 6,650 slot machines and some 295 gaming tables. The merger makes Sun Dreams the largest gaming company in Latin America valued at approximately US$400m.