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Caledonia Inv PLC (CLDN)

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Tuesday 03 July, 2001

Caledonia Inv PLC

Stmnt re -Sun International

Caledonia Investments PLC
3 July 2001


CALEDONIA INVESTMENTS PLC

STATEMENT BY SUN INTERNATIONAL HOTELS LTD

Set out below is the full text of a statement made today by Sun International
Hotels Limited ('Sun International'):

'

               SUN INTERNATIONAL ANNOUNCES

          MAJORITY SHAREHOLDER RESTRUCTURING


PARADISE ISLAND, The Bahamas, July 3, 2001 - Sun International Hotels Limited
(NYSE: SIH) today announced the restructuring of its majority shareholder, Sun
International Investments Limited ('SIIL'), and the resolution of certain
disagreements with SIIL and certain of its shareholders. SIIL and its
shareholders currently beneficially own approximately 67% of the Company's
outstanding shares. SIIL is itself owned in equal thirds by the Kersaf
Investments Limited Group ('Kersaf'), Caledonia Investments plc ('Caledonia')
and World Leisure Group Limited ('WLG'), a company controlled by Sol Kerzner,
Chairman and CEO of the Company. SIIL is currently governed by a shareholders
agreement (the 'SIIL Shareholders Agreement'), pursuant to which all major
decisions of SIIL require the unanimous consent of its shareholders. Kersaf
operates a number of hotel, casino and resort properties in southern Africa
under the Sun International name and there has been some confusion regarding
the use of the Sun International name by both Kersaf and the Company. As part
of the restructuring the following has been agreed:


 1. SIIL will be dissolved and the SIIL Shareholders Agreement will be
    terminated. As a result, the SIIL shareholders will hold their shares in
    the Company directly. As part of this dissolution, Kersaf will grant a
    proxy to vote its shares in the Company to WLG and Caledonia. As a result
    of these actions, Caledonia will own shares representing approximately 22%
    of the Company's outstanding shares and have the right to vote an
    additional 10%, WLG will own shares representing 17% of the Company's
    outstanding shares and have the right to vote an additional 10% and Cement
    Merchants SA, a partner in Kersaf's hotel, casino and resort management
    activities in southern Africa ('CMS'), will control shares representing
    approximately 6% of the Company's outstanding shares.


 2. D. A. Hawton, Chairman of Kersaf, has agreed to resign from the Board of
    Directors of the Company and Mr. von Rantzau, a principal of CMS, has been
    invited to join the Board.


 3. The Company has granted certain registration rights to Kersaf, Caledonia,
    WLG and CMS, and Kersaf has agreed to sell 2,000,000 of the Company's
    shares (the 'Designated Shares') in a registered public offering before
    June 30, 2002, subject to certain extensions.


 4. Kersaf has entered into a standstill agreement pursuant to which it has
    agreed for a period of five years not to acquire any shares of the
    Company. In addition, subject to certain rights of first refusal as
    between themselves, each of Caledonia, WLG and CMS have agreed for a
    period of five years not to acquire any additional shares of the Company
    in excess of 5,900,000, in the case of Caledonia and WLG, and 4,000,000,
    in the case of CMS.


 5. The term of the directors of the Company, consisting of Sol Kerzner, Peter
    Buckley, Eric Siegel, Howard Marks and Mr. von Rantzau, shall run until
    the Company's Annual General Meeting in 2004.


 6. After a transition period not to exceed one year, the Company will cease
    using the names 'Sun' and 'Sun International' and Kersaf will have
    exclusive rights to use such names.


 7. Until the earlier of June 30, 2002 or the date that Kersaf sells the
    Designated Shares, Kersaf will operate exclusively inside the continent of
    Africa and the Company will be free to operate in all other areas. After
    such period, each of the Company and Kersaf will be free to operate
    anywhere in the world.


 8. Kersaf will pursue a potential resort development project in Port Ghalib,
    Egypt, and the Company will receive between 25% and 50% of Kersaf's gross
    receipts from such project, if consummated, such percentage to be
    determined based on certain thresholds.


 9. Kersaf shall make a one-time payment of $3.5 million to the Company and
    issue a secured note to the Company with a principal amount of $12 million
    and a maturity date of June 30, 2003. The note will bear interest at a
    rate of 9% per annum payable quarterly.


Butch Kerzner, the Company's President commented, 'we are very pleased that we
have been able to achieve this restructuring and resolve our disagreements
with SIIL and certain of its shareholders. As a result of the orderly sale of
the shares held by Kersaf and the break-up of SIIL, the Company will increase
the public float of its shares and will be operated as an independent public
company. It further clears up any brand confusion between Kersaf and the
Company that may have existed in certain of our consumer markets.'


The Company will host a conference call at 10:00 AM, Eastern Time to discuss
this news release. All participants will be in a listen-only mode and the
floor will be opened for a question and answer session following the
presentation. The dial in numbers are 888.868.9078 (domestic) and 973.628.7055
(international). A replay of this conference call will be available for 48
hours following the call. The replay dial numbers are 877.519.4471 (domestic)
and 973.341.3080 (international) and the replay access code is 2539098.


Sun International Hotels Limited is an international resort and gaming company
that develops, operates and manages premier resort and casino properties. The
Company currently operates or manages resort hotels and/or casinos in The
Bahamas, Indian Ocean and Dubai. In addition, the Company earns income based
on the gross revenues of the Mohegan Sun, operated by an unaffiliated entity
in Connecticut. The Company's flagship property is Atlantis, Paradise Island,
a 2,317-room resort and casino located on Paradise Island in The Bahamas.


Statements in this release which are not historical facts are
'forward-looking' statements and 'safe harbor' statements under the Private
Securities Litigation Reform Act of 1995 that involve risks and/or
uncertainties, including risks and/or uncertainties as described in the
Company's public filings with the Securities and Exchange Commission.



Inquiries should be directed to Charles D. Adamo, Executive Vice
President--Corporate Development & General Counsel of Sun International Hotels
Limited at 1.242.363.6017.'

                                             STATEMENT ENDS




Commenting on the restructuring, Charles Cayzer, a director of Caledonia,
said:


        ' This reorganisation of the interests of Caledonia and our partners
        in Sun International represents a useful rationalisation of the
        ownership structure that will increase the future liquidity of our
        investment, although our economic interest will remain unchanged.


        Caledonia remains committed to its investment in Sun International and
        will continue to work with its management in the future development of
        the business.'


Following the restructuring, the Caledonia group will directly own 21.59% of
the total of 26,904,238 Sun International shares in issue.


Enquiries:


Charles Cayzer

Tel: 020 7481 4343