Cape Town - A group of interested bidders has "almost concluded" a detailed due diligence at the two South African casino properties owned by Nasdaq-listed Century Casinos.
During a recent quarterly update, Century vice-chairperson Peter Hoetzinger told investors that potential bidders had already visited the group's Caledon and Newcastle casinos "a couple of times".
He expected to bring the bidding parties to the table for final negotiations shortly.
Finweek earlier speculated that empowerment investment companies Grand Parade Investments (GPI) and Hosken Consolidated Investments (HCI) - which both have extensive gaming interests already - could be likely bidders.
Hoetzinger seemed confident of pulling off a sale in spite of tighter economic conditions and general market uncertainty. "We could see a result, but it all really depends on the price and whether we are happy with what they're offering."
He said it was "an active process" with a good number of interested parties which, in most cases, "are strong enough to handle such a transaction without a great deal of outside funding help".
He added that the group had received expressions of interest from serious, mostly South African companies, and reiterated that the purchase price for the local casinos would be the predominant factor in the decision to sell.
He indicated that the approximate Ebitda (earnings before interest, tax, depreciation and amotisation) used for selling 100% of the Caledon and 60% of the Newcastle casino was in the region of $8m (R80m).
Hoetziner acknowledged that casino values had "come down a bit from last year". But he believed Century would achieve an "attractive result" when considering the expansion opportunities available and the fact that there were no more casino licences available in these areas.
Quarterly results to end-September 2008 showed the net operating revenue at the Caledon Casino dropping almost 5% to R31m after gaming market share in the Western Cape dwindled from 5.1% last year to 4.8%.
The net operating revenue for the Century Casino and Hotel in Newcastle jumped 15% to R23.5m for the third quarter of 2008.
- Fin24.com