| Thu 22 Nov 2007, 16:41 | | CAE - CET - Acquisition of a further interest in g |
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CAE
CAE
CAE - CET - Acquisition of a further interest in grand Parade Investments
Limited
Cape Empowerment Trust Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/014606/06)
Share code: CAE
ISIN: ZAE000016952
("CET" or "the company")
ACQUISITION OF A FURTHER INTEREST IN GRAND PARADE INVESTMENTS LIMITED ("GPI")
1 Introduction
1.1 Shareholders are referred to the announcements published by CET on 13
November 2007 and by GPI on 14 November 2007, announcing the conclusion of
an agreement which resolves various issues between CET and GPI (the "GPI
Agreement").
1.2 In terms of the GPI Agreement it has been agreed, inter alia, that a BEE
owned company established by CET and in which CET will have a majority
interest will acquire a further 12 000 000 ordinary par value shares in the
capital of GPI ("GPI Shares") ("the GPI transaction"), and that the broad-
based BEE transaction previously announced by GPI and the GPI BBBEE Trust
will continue to be implemented (the "broad-based offer").
2 GPI Transaction
2.1 Background
2.1.1 GPI is a prominent Western Cape based broad-based BEE company with
significant interests in gambling and leisure. GPI currently holds -
2.1.1.1 a shareholding of 19.8% in Sunwest International (Proprietary) Limited
("Sunwest"), which owns the Grandwest Casino in the Cape Metropole as
well as the Table Bay Hotel in the V&A Waterfront. GPI has recently
announced that it has entered into an agreement with Sun International
(South Africa) Limited ("SISA") in terms whereof it has secured the
right to increase its economic interest in Sunwest from 19.8% to
approximately 30%, and to acquire voting control of Sunwest;
2.1.1.2 a 25,1% interest in Thuo Gaming (Western Cape) (Proprietary) Limited,
operating as GrandSlots; and
2.1.1.3 a 38% interest in the Worcester Casino (Proprietary) Limited trading
as the Golden Valley Casino, the new gaming complex near Worcester in
the Breede River Valley ("Golden Valley Casino").
2.1.2 GPI is the BEE partner to SISA in Sunwest and in Golden Valley Casino.
Sunwest, in particular, is an exceptional asset with Grandwest being
one of the most successful and profitable casinos in South Africa. It
is also the second-most visited destination in the Western Cape.
2.1.3 GPI has announced its intention to seek a listing of its shares on the
JSE Limited in the near future. CET supports this strategy.
2.1.4 CET has accumulated, over a period of time, various direct and
indirect interests in GPI with a view to ultimately owning or
controlling approximately 20% of GPI as a strategic investment. The
GPI transaction assists CET in realising this objective.
2.2 Salient terms of the GPI transaction
2.2.1 In terms of the GPI transaction, a BEE owned company established by
CET and in which CET will have a majority interest ("CET SPV"), shall
subscribe for 12 000 000 new GPI shares at a subscription price of
R4.25 per GPI share, i.e. for an aggregate subscription consideration
of R51 000 000. Shareholders should note that GPI recently sub-
divided its share capital on a one-to-four basis.
2.2.2 The subscription price is payable in cash. CET intends to fund such
subscription price through a combination of internal resources and
external funding.
2.2.3 In order to assist GPI in meeting its objective of having a
significant long-term BEE shareholder base, and specifically to assist
GPI in meeting certain requirements of the recently announced SISA
transaction, the GPI shares acquired by CET SPV shall be subject to
lock-up and related arrangements until June 2012.
2.2.4 The GPI transaction is not subject to any suspensive conditions, and
the issue of the new GPI Shares to CET SPV is expected to be
implemented on and be effective from on or about 26 November 2007.
2.2.5 The GPI BBBEE Trust will proceed with implementing the broad-based
offer.
2.2.6 Pursuant to the GPI Agreement, all litigation instituted by CET and
parties associated to it has been withdrawn.
2.2.7 CET shall be entitled to nominate one director for co-option onto the
board of directors of GPI. In addition, the remaining corporate
governance concerns of CET have been adequately addressed.
2.2.8 Following the successful implementation of the GPI transaction and the
broad-based offer it is expected that CET will have effective control
over 20% of GPI and an effective economic interest in GPI of
approximately 14%.
Cape Town
22 November 2007
Sponsor
Sasfin Capital
A division of Sasfin Bank Limited
Date: 22/11/2007 16:41:16 Produced by the JSE SENS Department.
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