| Thu 7 Mar 2002, 0:00 | | GoldReef deal |
|
SPECIFIC ISSUE OF SHARES FOR CAS,AND FURTHER CAUTIONARY
GOLD REEF CASINO RESORTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1989/002108/06)
(Share code GDF ISIN ZAE000028338)
("GoldReef")
ACQUISITION ANNOUNCEMENT, SPECIFIC ISSUE OF SHARES FOR CASH
AND FURTHER CAUTIONARY
1. INTRODUCTION
Further to the cautionary announcements published between 24 May 2001 and
16 January 2002, Nedcor Investment Bank Limited is authorised to announce
that GoldReef has entered into an agreement with Casinos Austria
International Holding GmbH ("Casinos Austria"), a company registered in
Austria, to introduce Casinos Austria as a significant strategic shareholder
in Gold Reef with effect from 1 January 2002 through a combination of:
* the acquisition of Casinos Austria's South African casino assets ("the
acquisition"); and
* a specific issue of ordinary shares in GoldReef ("GoldReef ordinary
shares") to Casinos Austria for cash ("specific issue of shares for cash"),
(jointly, "the transaction"). The agreement is subject to certain
conditions precedent, as set out below.
2. DETAILS OF THE TRANSACTION
Casinos Austria will subscribe for 35 600 000 GoldReef ordinary shares at
R3,00 per share ("issue price"). This issue price represents a premium of
51,1% to the 30 day volume weighted average traded price and 35,5% to the
closing price of the GoldReef ordinary shares on 23 May 2001 (the date
immediately prior to the issue of the first cautionary announcement)
respectively. This issue price further represents a premium of 27,2% to the
closing price of GoldReef ordinary shares on 6 March 2002.
The subscription consideration payable by Casinos Austria will be discharged
through a cash payment of R6 000 000 and the transfer to GoldReef of Casinos
Austria's South African assets, as set out below:
* 11,9% of the issued preference share capital of Akani Leisure Investments
(Proprietary) Limited ("ALI"), a special purpose vehicle providing funding
to the Gold Reef City empowerment partners (equivalent to an effective
interest of 4,16% in Akani Egoli (Proprietary) Limited which owns the Gold
Reef City Casino and Theme Park) and all claims which Casinos Austria may
have against ALI, for R23 503 291 ;
* 10% of the issued ordinary share capital of Akani Msunduzi (Proprietary)
Limited ("AM"), (which owns the Golden Horse Casino in Pietermaritzburg) and
all claims which Casinos Austria may have against AM for R8 906 662;
* 20% of the issued preference share capital of Akani Leisure Msunduzi
Investments (Proprietary) Limited ("ALM") (a special purpose vehicle
providing funding to the Golden Horse Casino empowerment partners) and all
claims which Casinos Austria may have against ALM for R 11 735 595;
* 26,66% of the issued ordinary share capital of West Coast Leisure
(Proprietary) Limited ("WCL") (which owns Casino Mykonos) and all claims
which Casinos Austria may have against WCL for R 8 153 124;
* 50% of the issued ordinary share capital of CAI Gold Reef Management
(Proprietary) Limited ("CAI Gold Reef"), and claims which Casinos Austria
may have against CAI Gold Reef including the entitlement to receive a
royalty fee of 0,625% based on gross gaming revenue in each of the casino
operations (including the Casino Mykonos and Golden Horse casino management
contracts, and an effective 75% interest in the Gold Reef City Casino
management contract) for R 48 501 326;
* all of the issued ordinary shares in and all claims which Casinos Austria
may have against Akani Egoli Management (Proprietary) Limited for R1; and
* all of the issued ordinary shares in and all claims which Casinos Austria
may have against Akani Msunduzi Management (Proprietary) Limited for R1.
(collectively "Casinos Austria's South African assets").
As set out above, Casinos Austria will subscribe for 2 000 000 GoldReef
ordinary shares for R6 000 000 in cash. This specific issue of shares for
cash will be subject to the approval of GoldReef shareholders in a general
meeting in accordance with the JSE Securities Exchange South Africa Listings
Requirements ("listings requirements").
3. RATIONALE FOR THE TRANSACTION
GoldReef's ongoing strategic objective is to consolidate the ownership of
its underlying investments in one listed company and to introduce the
existing investors in the underlying investments as long-term strategic
shareholders in GoldReef.
The transaction will further consolidate GoldReef's interests in Gold Reef
City Casino, Casino Mykonos and Golden Horse Casino and will increase its
effective interest in the management contracts of these casinos. Casinos
Austria currently holds 588 034 GoldReef ordinary shares. The transaction
will allow Casinos Austria to consolidate its South African assets through
acquiring an additional 16,7% shareholding in GoldReef, increasing its total
shareholding in GoldReef to 17%.
The introduction of Casinos Austria as a strategic shareholder will enable
GoldReef and Casinos Austria through their respective expertise in
developing, structuring and financing of major casino complexes and
knowledge and expertise in casino management, both locally and
internationally, to continue to actively pursue, obtain and develop further
casino projects and management contracts domestically and internationally.
4. RESULTANT GROUP STRUCTURE
The resultant group structure post the acquisition will be as follows:
GoldReef Casino Interest
Akani Egoli(Gold Reef City)50%(79,75%)*
WCL(Casino Mykonos) 53,3%(53,3%*)
AM(Golden Horse Casino) 50%(85%*)
Goldreef 100%
CAI Gold Reef
Management
Gold Reef City Casino management contract 75%
Casino Mykonos and Golden Horse Casino management
Contracts 100%
Various other South African Casino Licence
applications
* denotes economic interest
5. FINANCIAL EFFECTS
Had the transaction been effected on 1 January 2001 the effects of the
transaction on the published interim unaudited results at 30 June 2001 would
have been as follows:
Per GoldReef ordinary Before After Percent
share (cents) age
change
Net tangible asset 296,0 297,1 0,4%
value per share
Headline earnings per 22,2 21,0 -5,4%
share
Earnings per share 22,2 21,0 -5,4%
Notes:
1 Headline earnings per share and earnings per share figures in the
"After" column have been calculated based on six months trading for Gold
Reef City and Casino Mykonos, and no income from Golden Horse Casino.
Accordingly, the effect of the transaction would be negative on an
historical basis. It is anticipated that the transaction will be earnings
enhancing on future headline earnings and earnings per share.
2 Interest earned on the specific issue of shares for cash has been
calculated at the then ruling prime rate, as the cash proceeds would have
been utilised to repay debt.
6. CONDITIONS PRECEDENT
The transaction is subject to the fulfilment of, inter alia, the following
suspensive conditions:
* approval of the acquisition by the relevant gaming boards;
* approval of the specific issue of shares for cash by the GoldReef
shareholders in accordance with the listings requirements;
* approval of all other regulatory authorities as required;
* the entering into of agreements firstly between Consolidated Rand Parts
(Proprietary) Limited ("CRP") and Twintech (Proprietary) Limited
("Twintech") (being the controlling shareholders of GoldReef) and secondly
between CRP, Twintech and Casinos Austria pertaining to their interests in
GoldReef; and
* the release of Casinos Austria from its suretyship given for the debt
funding of AM in the amount of R11 000 000.
7. FURTHER CAUTIONARY
As the transaction is subject to the suspensive conditions (including gaming
board approval) being fulfilled, shareholders are advised to continue to
exercise caution when dealing in GoldReef ordinary shares until a further
announcement is made in this regard.
Johannesburg
7 March 2002
Investment bank and sponsor
Nedcor Investment Bank Limited
Attorneys
Werksmans
Corporate law adviser and consultants
Edward Nathan & Friedland
Date: 07/03/2002 05:05:00 PM Produced by the JSE SENS Department
