PDF 25 MB - Sun International | Investor Centre

JOINT REPORT OF THE CHIEF EXECUTIVE AND CHIEF FINANCIAL OFFICER continued
The SFIR interest is net of R21 million in borrowing costs which have been capitalised to the Monticello project. SFIR’s facilities have been restructured
resulting in the shareholders funding a US$50 million repayment of the long term facility.
With the exception of the SFIR and TCN funding, all debt is denominated in Rand. The SFIR debt is denominated in US Dollars (US$70 million) however
the debt has been fully hedged to Chilean Pesos at an exchange rate of CLP543:US$1. The debt in the statement of financial position is disclosed at the
Rand equivalent of the US Dollar balance and the mark-to-market on the Peso/US Dollar hedge is disclosed as a hedge asset or liability. The TCN debt
represents loan funding from shareholders with Sun International having provided US$15 million of the debt and our partners in TCN US$28 million.
Borrowing facilities of the group total R7.4 billion (excluding the Employee Share Trusts) of which R6.1 billion was utilised at 30 June 2010. The existing
facilities and future cash flows from operations are in excess of our funding requirement for on-going commitments. Details of interest rates are given
on page 173 in the annual financial statements.
Interest rate hedging
In managing the group’s exposure to interest rate risk the group has taken out a number of hedges. The table below summarises the interest rate hedges
that were in place:
Company Period of hedge
1. SHAREHOLDER DELIVERY
Debt on
which
interest rate
hedged
Effective
hedge
rate
SISA – Preference shares 2 October 2008 – 1 September 2010 R464 million 9.22%
SIL – Preference shares 2 October 2008 – 30 September 2010 R925 million 9.71%
The hedge taken out for SFIR expired on 31 December 2009. Currently the interest rate is floating at 3.43% above the Camara (Chile base rate) which
is currently approximately 2%. The SISA and SIL preference shares reverted back to floating rates of 63% and 67% of prime respectively at the expiry
of the hedge.
As at 30 June 2010, interest rates on 35% (2009: 45%) of the group’s borrowings were fixed, which are the V&A loan, the loan from Vacation Club
members and the balance of the preference shares on which the interest rate hedges are in place. 20% (2009: 67%) of these rates were fixed for periods
longer than 12 months.
31