| Thu 23 Sep 2010, 8:48 | | GPL - GPI - Exercise by GPI of its option to acquire an additional 140 182 |
|
GPL
GPL
GPL - GPI - Exercise by GPI of its option to acquire an additional 140 182
Sunwest International (Proprietary) Limited shares
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 BY GPI OF ITS OPTION TO ACQUIRE AN ADDITIONAL 140 182 SUNWEST
INTERNATIONAL (PROPRIETARY) LIMITED ("SUNWEST") SHARES AND PAYMENT OF 10 CENTS
PER GPI SHARE TO CERTAIN GPI SHAREHOLDERS HOLDING 43 MILLION SHARES AS
COMPENSATION FOR RESTRICTING THE SALE OF THEIR SHARES IN GPI UNTIL 30 JUNE 2012
1.INTRODUCTION
1.1 In terms of the Option Agreement of 17 August 2007 concluded between GPI
and SunWest ("the Option Agreement"), GPI was granted the option to
subscribe for between 500 131 and 700 182 new "N" ordinary shares in
SunWest ("the SunWest Option") subject inter alia to GPI ensuring that
between 25% and 35% of its issued share capital is beneficially held by
black persons or other black entities in a lock-in structure (as defined in
the Option Agreement) until 30 June 2012. The Option Agreement furthermore
required that the SunWest Option be exercised before 29 June 2010, failing
which any unexercised portion thereof would lapse.
1.2 Shareholders are referred to the SENS announcement of 6 August 2008 in
terms of which GPI exercised its option to acquire 560 000 "N" ordinary
shares in SunWest in terms of the SunWest Option. On 28 June 2010 GPI duly
exercised the remaining portion of the SunWest Option to acquire 140 182
new "N" ordinary shares in SunWest in accordance with the Option Agreement
("the additional SunWest Shares").
2. PARTICULARS OF THE EXERCISE OF THE SUNWEST OPTION
2.1 GPI subscribed for the additional SunWest Shares at R165 per share for a
total subscription consideration of R23 130 030, which amount has already
been settled in cash by GPI in accordance with the Option Agreement.
2.2 Notwithstanding GPI`s exercise of the SunWest Option, the implementation
thereof in terms of the Option Agreement was subject to SunWest`s auditors
performing an audit of GPI`s locked-in shareholding which was required to
confirm that at least 35% of GPI`s issued ordinary share capital is
beneficially held by black persons or other black entities (as defined in
the Option Agreement), who must also agree in writing 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 suitably qualified black persons or
other black entities.
2.3 The board of GPI ("the Board") is pleased to report that the aforementioned
audit has been concluded and GPI has satisfied the above conditions.
3. PAYMENT OF THE LOCK-IN CONSIDERATION
3.1 In achieving the 35% threshold as referred to in 2.2 above so as to enable
GPI to exercise the remaining portion of the SunWest Option, GPI concluded
lock-in agreements on 25 June 2010 ("Lock-In Agreements") with Quintessence
Opportunities (Proprietary) Limited, Nadesons Investments (Proprietary)
Limited, Prosperity Through Partnership Limited and Mr A. Abercrombie ("the
Locked-In parties"), all of which are either black persons or other black
entities as defined in terms of the Option Agreement who beneficially own
and control ordinary shares in GPI.
Given the time constraints in exercising the SunWest Option timeously, and
the inhibitive costs associated with any extended offer being made to all
black GPI shareholders, the Board identified the Locked-In parties as being
the most practicable parties to approach on such short notice under the
circumstances.
3.2 The Lock-In Agreements provide that for the duration of the lock-in period
(being the period ending 30 June 2012), the Locked-In parties shall each be
restricted in trading their Locked-In shares in the manner as contemplated
in paragraph 2.2 above.
3.3 In lieu of limiting their rights in such manner, and in securing GPI`s
exercise of the remaining portion of the SunWest Option, the Board resolved
to compensate the Locked-In parties in the amount of 10 cents per each of
their Locked-In shares, representing a maximum of R4.3 million in aggregate
in cash ("the Lock-In consideration"). In determining the quantum in
respect of the Lock-In consideration, the Board duly considered the value
attributable to the additional SunWest Shares.
3.4 In the interests of transparency and fairness to all GPI shareholders, the
Board obtained, on a voluntary basis, a fairness opinion in this regard
from Mazars Corporate Finance (Proprietary) Limited ("Mazars"). Mazar`s
determined that the terms of payment of the Lock-In consideration is fair
to GPI shareholders and such fairness opinion shall be available for
inspection at the registered office of GPI from the date of this
announcement until the date of the annual general meeting of the company as
referred to in 4.2 below.
4. SPECIFIC PAYMENT TO CERTAIN SHAREHOLDERS
4.1 The JSE Limited ("JSE") has ruled that the payment of the Lock-In
consideration by GPI to the Locked-In parties is a specific payment to
shareholders as defined in terms of rule 5.85 of the JSE`s Listings
Requirements.
4.2 Accordingly, notwithstanding the terms of the Lock-In Agreements that
require inter alia the satisfactory completion of the audit verification
process as referred to in paragraph 2.2 above, the payment of the Lock-In
consideration is further subject to the passing of an ordinary resolution
for such specific payment which is to be tabled at GPI`s annual general
meeting to be held on or about 9 December 2010 (the "AGM").
4.3 Although the Locked-In parties are in terms of the JSE`s Listings
Requirements related parties as defined, the specific payment of the Lock-
in consideration is not a related party transaction. Accordingly, in the
interests of good corporate governance, the Locked-In parties will be taken
into account for quorum purposes in respect of the aforementioned ordinary
resolution, but will be excluded from voting thereon.
4.4 Subject to shareholders` approval, it is anticipated that payment of the
Lock-In consideration will be made to the respective Locked-In parties as
soon as possible after the AGM.
Full details of the specific payment to the Locked-In parties will be
included in GPI`s annual report, which will be posted to shareholders in
due course.
4.5 The illustrative unaudited pro forma financial effects of the payment of
the Lock-In consideration as set out below have been prepared to assist GPI
shareholders in assessing the impact of the payment of the Lock-In
consideration on Net Asset Value per share ("NAV") and Tangible Net Asset
Value per share ("TNAV"), as well as earnings per share ("EPS") and
headline earnings per share ("HEPS").
The material assumptions are set out in the notes following the table. The
pro forma financial effects are the responsibility of the directors and are
provided for illustrative purposes only.
Due to the nature of pro forma financial effects, they may not necessarily
fairly present the financial position of the company, change in equity,
results of operations or cash flow after the payment of the Lock-In
consideration.
Results Before the After the Change
including the payment of payment of (%)
Lock-In the Lock-In the Lock-In
consideration consideration consideration
EPS 23.89 25.08 23.83 (4.98)
HEPS 15.45 16.64 15.40 (7.45)
NAV per GPI 384 385 384 (0.26)
share
TNAV per GPI 357 358 357 (0.26)
share
Notes:
1. The amounts in the "Results including the Lock-In consideration" column
represent the earnings per share (EPS), headline earnings per share (HEPS),
net asset value (NAV) per share and tangible net asset value (TNAV) per
share results as disclosed in the published provisional reviewed financial
results for the year ended 30 June 2010. A provision for the Lock- in
consideration and transaction costs has already been accounted for in the
aforementioned published provisional reviewed results.
2. The amounts in the "Before the payment of the Lock-In consideration" column
excludes the payment of the Lock-in consideration amounting to R4.3 million
and transaction costs of R1,03 million.
3. The "After the payment of the Lock-In consideration" column represents the
EPS and HEPS after the inclusion of the Lock- in consideration, transaction
costs and interest foregone on the Lock - in consideration paid which has
been calculated at an average interest rate of 6.51% assuming the effective
date of the payment of the Lock-in consideration was 1 July 2009.
4. A taxation rate of 28% has been applied to interest foregone as calculated
in accordance with note 3 above. No tax effect has been provided for on the
Lock- in consideration and transaction costs as these items are capital in
nature.
5. The amounts in the "After the payment of Lock- in consideration" column
represents the NAV and TNAV per share after the inclusion of the Lock - in
consideration and transaction costs assuming the Lock- in consideration was
paid as at 30 June 2010.
6. The percentage change column has been calculated as the difference between
the "After" and "Before" payment of the Lock- in consideration columns.
7. A reporting accountants` report on the pro forma financial effects of the
payment of the Lock-In consideration, as set out above, and the pro forma
consolidated statement of financial position and consolidated statement of
comprehensive income, will be issued and contained in GPI`s annual report
to be posted to shareholders in due course.
8. Benefits of exercising the SunWest Options
Based on the average price of the SunWest shares purchased by GPI during
the course of April and May 2010 of R331,56 per SunWest share, the cash
cost of exercising the remaining portion of the SunWest option of R165 per
SunWest share and the additional dividend of R7,5 million accruing to GPI
as a result thereof, it is estimated that all of the shareholders of GPI
have benefited some 5.5 cents per GPI share after the provision for the
Lock-in consideration and transaction costs as referred to in notes 1 and 2
above (6.69 cents per GPI share before the Lock-in consideration and
transaction costs as referred to in notes 1 and 2 above).
23 September 2010
Cape Town
Sponsor
PSG Capital (Pty) Limited
Corporate adviser
Leaf Capital (Pty) Limited
Independent Expert
Mazars Corporate Finance (Pty) Limited
Legal adviser
Bernadt Vukic Potash & Getz Attorneys
Date: 23/09/2010 08:48:10 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
