| Wed 6 Aug 2008, 14:08 | | GPL - Grand Parade Investments Limited - Exercise Of Sunwest International |
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GPL - Grand Parade Investments Limited - Exercise Of Sunwest International
(Proprietary) Limited ("Sunwest") Share Option
Grand Parade Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1997/003548/06)
Share code: GPL & ISIN: ZAE000119814
("GPI" or "the company")
EXERCISE OF SUNWEST INTERNATIONAL (PROPRIETARY) LIMITED ("SUNWEST") SHARE OPTION
1. INTRODUCTION
1.1 Shareholders are referred to annexure 12 of the GPI Pre-Listing Statement
("PLS") issued on 19 May 2008 and specifically to the details pertaining to
the SunWest transaction set out therein.
1.2 As stated in the PLS, on 17 August 2007 GPI and SunWest concluded an
agreement in terms whereof GPI was granted the option to subscribe for
between 500 131 and 700 182 new "N" ordinary shares in SunWest ("Option
Agreement") subject to GPI ensuring that between 25% and 35% of its issued
share capital is beneficially held by black persons or black companies with
such shares being in a lock-in structure until 2012.
1.3 Shareholders are hereby advised that GPI has duly exercised a portion of
the option to subscribe for 560 000 new shares in SunWest ("the
Transaction"), the details of which are as set out in this announcement.
It is noted that it is the intention of GPI to take up the balance of the
option as its locked-in black shareholding increases to 35%. GPI has until
29 June 2010 to exercise the balance of the option.
1.4 Shareholders are advised further that the exercise of the option
constitutes a category 2 transaction in terms of the Listings Requirements
of the JSE Limited.
2. PARTICULARS OF THE TRANSACTION
2.1 Subject of the Transaction
The subject of the Transaction is 560 000 "N" ordinary shares in the share
capital of SunWest.
2.2 Condition precedent
The Transaction was subject to the condition precedent that between 25% to
35% of the share capital of GPI is beneficially held by black persons or
black companies who agree, inter alia, that for the duration of the lock-in
period (being the period ending 30 June 2012) they will only dispose of
their GPI shares to other black persons or black companies. SunWest duly
conducted an audit of GPI`s shareholding for purposes of verifying the
fulfilment of the aforementioned condition precedent and has duly confirmed
that it is satisfied with same to GPI.
Accordingly the condition precedent was fulfilled yesterday, Tuesday 05
August 2008.
2.3 Purchase consideration
GPI will subscribe for the additional 560 000 "N" ordinary shares in the
share capital of SunWest at R165 per share for a total subscription
consideration of R92.4 million, which amount has been settled in cash.
2.4 Call Option
In the event that the number of locked-in GPI shareholders (being those
shares held by black persons or black companies) reduces to below 25%
before 30 June 2012 and the minimum percentage is not restored within an
agreed specified time period, then SunWest shall have a call option to
repurchase the additional 560 000 "N" ordinary shares subscribed for by GPI
in terms of the Transaction.
3 RATIONALE FOR THE TRANSACTION
The Transaction will increase GPI`s stake in SunWest from 26.41% to 29.24%.
As more fully set out in paragraph 1.2 of the PLS, it has been GPI`s stated
intention to increase its stake in SunWest to at least 30% (economic
interest) in the immediate/short term and the Transaction forms part of
achieving this stated intention.
Due to the fact that the Transaction is accounted for at cost, the
Transaction does not have a significant financial effect on GPI`s net asset
value or net tangible asset value per share or on GPI`s earnings per share
or headline earnings per share. Based on previous transactions that have
taken place, the directors estimate the fair value of SunWest shares to be
well in excess of the option price of R165 per share and that the
Transaction is anticipated to have a positive impact on GPI`s financials in
the coming years.
4. DETAILS OF THE BUSINESS OF SUNWEST
SunWest is an investment holding company that holds the following major
assets:
4.1 GrandWest Casino
The GrandWest casino is undoubtedly the darling in Sun International
Limited`s ("Sun") stable generating substantial returns since its
establishment in 2001, outperforming all of its gaming peers in the Sun
group. GrandWest`s turnover for the 2007 financial year was approximately
R1.6 billion (R1.4 billion: 2006 and six months to December 2007: R879
million) while its closest rival, Sun City, showed revenues of just over R1
billion. With turnover generating an operating profit of R594 million for
the 2007 financial year (R504 million: 2006 and R293 million for the six
months to December 2007), GrandWest makes GPI`s continued and increased
investment in SunWest an absolute imperative.
4.2 Table Bay Hotel
Like GrandWest, it too is a SunWest asset that has shown remarkable
performance in the buoyant inbound tourism market. Its 2007 financials show
an increased average room occupancy of 72% (70%: 2006 and 72% in the six
month period to December 2007) with an average room rate of R1 558 per room
(an increase of 11% to the prior period; R1 609 average rate per room in
the period to December 2007). EBITDA contribution of R63 million for the
2007 financial year represents an improvement of 21% to 2006 (EBITDA for
the six months to December 2007 of R58 million). This is as a result of
improved margins arising from the steady increase in tourist numbers.
4.3 Cape Town International Convention Centre ("CTICC")
This is a world-class convention centre that, since its completion in 2003,
has seen thousands of visitors across all walks of life attending consumer
exhibitions, conferences and trade shows. The CTICC generated a turnover of
R100 million for the year ended 30 June 2007. The fifth annual independent
study on the impact of the CTICC showed that the CTICC contributed
approximately R2,4 billion to South Africa`s Gross Domestic Product,
resulting in the direct employment of nearly 3 796 people.
06 August 2008
Cape Town
Sponsor
PSG Capital (Pty) Limited
Corporate adviser
Leaf Capital (Pty) Limited
Date: 06/08/2008 14:08:03 Produced by the JSE SENS Department.
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