GPI to proceed with R231-million deal
“Transaction Paves The Way For GPI Listing”: Adams
[Cape Town, 15 October 2007] Empowerment vehicle Grand Parade Investments Limited (GPI) has reached an agreement with Sun International to purchase a further 4% in SunWest, which owns the GrandWest Casino and the Table Bay Hotel. GPI has also secured options to acquire further equity in SunWest, which it intends to exercise, and which potentially increases GPI’s total shareholding in SunWest from 19% to just under 30%.
GPI chairman, Hassen Adams, said today that the deal was further progress towards listing the company.
“Our goal as the board of GPI is to create outstanding value for our shareholders. From a single investment of just R28-million seven years ago, we have grown into a billion rand company, and since 2002, have paid an annual dividend to our shareholders. This while continuing to make new and successful investments.
“Planning for the listing of GPI is at an advanced stage. We are very excited at the prospect of being directly listed on the JSE as it will benefit all our shareholders, providing them with a market value for their shares which could be realised if they so wish, or if they choose to retain their equity, continued dividends and further capital growth. It is clear from the recent activity in the GPI shares that the company has significant value. There is immense interest in GPI shares, and with good reason”.
Robust growth was the company’s aim, said Adams, underpinned by its substantial interest in cash generative investments like SunWest, the Golden Valley Casino at Worcester, and GrandSlots, the limited payout machine gaming operation which was trading significantly ahead of expectations.
The agreement with Sun International, which is now subject only to regulatory approvals, sees:
• The sale of 20,019 N ordinary shares and 540,127 O ordinary shares to GPI being a 4.0% shareholding in SunWest for a purchase consideration of R83.4-million;
• An option in favour of GPI to acquire a further 344,821 N shares (2.46% of the SunWest shares in issue) from SISA for a total consideration of R146.6-million. GPI intends to exercise the option and will purchase these shares;
• The granting by SunWest of options over 700,182 new N shares (5% of the current SunWest shares in issue) at a strike price of R165 per SunWest share to GPI, exercisable by 29 June 2010.
The granting of this SunWest option is conditional on the implementation and successful maintenance of a lock-in of a black economic empowerment shareholding within GPI of at least 25% and up to 35% until 29 June 2012. The SunWest options will be granted to GPI on a sliding scale, such that should GPI achieve a lock-in BEE shareholding of 25% it will be entitled to 500,131 of the SunWest options with the maximum of 700,182 SunWest options being exercisable by GPI should it achieve a 35% lock-in BEE shareholding.