Tsogo Sun sells its City Lodge stake and reports a R30m loss

Tsogo Sun has sold most of its shareholding in City Lodge Hotels, realising R200 million in proceeds from a major share sale in October 2025. The transaction, which reduced the group’s holding from 11.52% to 3.2%, resulted in a cumulative loss of R30 million. Tsogo Sun said it expects to sell the remaining shares within the current financial year. While not directly related to its casino operations, the disposal highlights a continued push by the Johannesburg hospitality group to streamline its portfolio and strengthen liquidity.

Strategic refocus behind the sale

The sale marks another step in Tsogo Sun’s broader plan to go back to its core business of casino gaming and hospitality. Over recent years, the company has prioritised debt reduction and efficiency, trimming non-core investments to fund growth opportunities within its primary business lines.
Although City Lodge operates in the same hospitality space, Tsogo Sun’s move suggests a clearer distinction between its owned-and-operated properties and passive shareholdings. By exiting its minority position, the group removes exposure to external management structures while freeing up capital for reinvestment or shareholder returns.

Financial outcome and disposal details

The company confirmed that the October 2025 sale of 50 million shares yielded proceeds of approximately R200 million, resulting in a cumulative loss of R30 million. Following the disposal, Tsogo Sun’s shareholding in City Lodge dropped from 11.52% to 3.2%.
The group has indicated it expects to sell the balance of its stake during the current financial year, completing its exit from the investment. 

Sector implications and investor outlook

For investors, Tsogo Sun’s exit from City Lodge underscores confidence in its internal growth strategy and the ongoing consolidation of its entertainment and hotel brands. The disposal also aligns with its renewed attention to digital initiatives, including expansion into online gaming and sports betting. These are the areas seen as higher-margin and growth-oriented.
Analysts note that the group’s continued divestment of non-strategic assets could strengthen earnings stability over the medium term, particularly if market volatility continues to affect their other holdings.

What’s next for Tsogo Sun

With the City Lodge transaction mostly complete, Tsogo Sun is expected to release further clarity on its capital allocation plan in upcoming results. The group’s management has emphasised a focus on sustainable returns, strong cash generation, and leveraging its gaming and hospitality footprint.
Should the remaining stake be sold within the year as projected, Tsogo Sun will have completed one of its most significant portfolio adjustments in recent years. Therefore positioning itself to concentrate on operational excellence and long-term shareholder value.