In South Africa, Hosken Consolidated Investments – the owners of continental casino giants Tsogo Sun – has ramped up its legal battle with the nation’s lottery operator, Ithuba.
HCI bailed out Ithuba to the tune of $22.68m (R325m) back in 2015 and has reportedly been attempting to seize control of operations ever since. In response the lottery operator has attempted to pay back a portion of the loan early in order to severe relations with the investors.
Hoskens has claimed that early indicators from Ithuba show that it is not generating enough positive cashflow to repay the loans plus interest and as such the firm should be able to step in – and has petitioned an arbitration panel to rule as such.
“It would be extraordinary if a negative cash flow available for debt service in the first month of operation would entitle HCI to exercise step-in rights in perpetuity,” Ithuba said in legal papers.
“Remarkably. That is the very essence of HCI’s argument. It is an untenable argument, because it yields an outcome that makes no commercial sense and is indicative of gross opportunism.”