Chilean investment firm Nueva Inversiones Pacífico Sur (ISP) has purchased the remaining 65% stake it did not own in casino operator Sun Dreams from South African hotel chain Sun International, in a deal valued at $160 million.
Sun Dreams is the largest casino operator in Chile, while ISP is a family-owned investment company.
The purchase puts an end to a dispute between the two parties, in which the South African hospitality group had filed an arbitration claim against ISP in January, arguing that the Chilean company had failed to make a $85 million payment for its previously announced acquisition of a 15% share in casino business Sun Dreams, according to Chilean law firm Carey, which acted as local counsel to Sun International.
ISP had approached Sun International with an offer to purchase a 50% stake in the casino, but Sun International denied those claims. The case was expected to go to arbitration in 2021, but the latest development has settled the dispute.
Sun International’s sale follows a series of recent challenges for the casino business, with Sun Dreams having faced financial uncertainty amid the Covid-19 pandemic.
Sun International will use the proceeds of the sale to pay existing debt obligations relating to its other businesses in Latin America, as well as to fund its operations in South Africa.
Sun Dreams was created in 2016 when Sun International entered into a joint venture with Chilean casino operator Dreams. Sun International operates casinos in Chile, Panama and Peru, while its operations in South Africa account for around 42% of the casino industry there.
Carey’s team advising Sun International was led by partners Jorge Carey, Gonzalo Fernández and Jorge Ugarte, and associates Gustavo Marambio, Domingo Russi and Valeria Osorio. The company was also advised by its in-house counsel Andrew Johnston.