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PTG
PTG
Peermont Global - Acquisition of a controlling interest in the Tusk Casino
Resorts and Hotels Group and Black Empowerment Transactions
Peermont Global Limited
(Incorporated in the Republic of South Africa)
(Registration number 1995/0004449/06)
Share Code: PTG
ISIN: ZAE000058053
("Peermont Global")
ACQUISITION BY PEERMONT GLOBAL OF A CONTROLLING INTEREST IN THE TUSK CASINO
RESORTS AND HOTELS GROUP AND BLACK EMPOWERMENT TRANSACTIONS
1. INTRODUCTION
Shareholders are referred to the announcements dated 21 December 2005,
19 May 2006 and 2 August 2006, in which the Peermont Global board of
directors advised of the conclusion of a transaction, subject to the
fulfilment of certain conditions precedent, in terms of which Main
Street 382 (Proprietary) Limited, to be renamed Peermont Global Tusk
Holdings (Proprietary) Limited ("PGTH"), a wholly-owned subsidiary of
Peermont Global, acquired a controlling interest in Tusk Casino
Resorts and Hotels Group ("Tusk Resorts Group") from:
- Moribo Investments (Proprietary) Limited and Alliance Investment
Holdings (Proprietary) Limited (two wholly owned entities of
Thebe Investment Corporation (Proprietary) Limited) and the
Lesedi Trust;
- Messrs JS Franklin, TE Mokoena, and IP Mossop;
- Tusk JIT Holdings (Proprietary) Limited; and
- Stepney Investments (Proprietary) Limited, Bhambatha Investments
(Proprietary) Limited and the other shareholders of Emanzini
Leisure Resorts (Proprietary) Limited ("Emanzini"),
(collectively "the Tusk sellers") ("the Tusk transaction").
Shareholders are hereby advised that all outstanding conditions
precedent in relation to the Tusk transaction have now been met.
2. THE TUSK TRANSACTION STRUCTURE AND PURCHASE CONSIDERATION
2.1 Tusk Resorts (Proprietary) Limited ("Tusk Resorts")
The purchase consideration of R358 413 259, payable on 21 August
2006, as set out in the table in paragraph 2.3 below, in respect
of the Tusk Resorts transaction, relates to the acquisition of
the following direct or indirect shareholdings:
- 70% of Tusk Resorts;
- 100% of Tusk Resorts Holdings (Proprietary) Limited;
- 100% of Tusk Casino and Hotel Management (Proprietary)
Limited ("TCHM");
- 100% of Tusk Casino and Hotel Management Holdings
(Proprietary) Limited; and
- 100% of Tusk Venda Casino Limited,
("the Tusk Resorts transaction").
2.2 Emanzini
The purchase consideration of R133 651 501, payable on 21 August
2006, as set out in the table in paragraph 2.3 below, in respect
of the Emanzini transaction, relates to the acquisition of the
following direct or indirect shareholdings and rights:
- 100% of Emanzini;
- 100% of Tusk Resorts Holdings B (Proprietary) Limited;
- 100% of Tusk Casino and Hotel Management B (Proprietary)
Limited ("TCHM B");
- 30% of the gross management fee payable by Emanzini to its
shareholders (in addition to the remaining 70% of the
management fees payable to TCHM B); and
- 100% of Tusk Casino and Hotel Management Holdings B
(Proprietary) Limited,
("the Emanzini transaction").
2.3 The purchase consideration
The purchase consideration for the Tusk transaction, in terms of
the pricing mechanism as advised previously in the circular to
shareholders dated 28 February 2006 is set out in the table
below.
Tusk Resorts Emanzini Total
transaction transaction
R R R
Agreed price at 368 810 682 139 258 064 508 068 746
31 March 2006
Less: Retentions* (20 000 000) (9 999 999) (29 999 999)
Plus: Escalations 9 602 577 4 393 436 13 996 013
from 1 April 2006 to
21 August 2006
Total payable on 21 358 413 259 133 651 501 492 064 760
August 2006
* Retentions are security for warranties and indemnities given
by the Tusk sellers and escalated at 7% from 1 April 2006 to
the extent that they are no longer required and are then
paid to the relevant Tusk sellers.
2.4 Taung agterskot
The purchase consideration for the Tusk Resorts transaction of
R358 413 259 excludes the Taung agterskot in terms of which the
purchase consideration for the Tusk transaction is to be adjusted
should Tusk Taung, a division of Tusk Resorts, be disposed of by
Tusk Resorts. The agreements relating to the disposal of Tusk
Taung have been signed but are subject to certain conditions
precedent. If these conditions precedent are fulfilled by 31
March 2007, an approximate amount of R7,4 million, calculated as
at 31 March 2006, will become payable to the Tusk sellers. The
Tusk Taung purchase consideration will escalate by 7% per annum
from 1 April 2006 until the date of payment of the agterskot
amount.
2.5 Financial overview
A financial overview of the operating entities within the Tusk
Resorts Group, including revenue, EBITDA and EBIT for the twelve
months ended 31 March 2006 and borrowings and cash as at 31 March
2006, is set out in the table below.
Revenue EBITDA EBIT Borrowings Cash
Rm Rm Rm Rm Rm
Year Year Year 31 March 31
ended 31 ended 31 ended 2006 March
March March 31 2006
2006 2006 March
2006
Tusk Resorts 204,8 70,7 57,3 91,1 25,6
TCHM 20,8* 13,1 13,0 0 17,3
Emanzini 77,1 26,5 19,9 77,8 13,1
TCHM B 5,5* 3,7 3,7 0 0
30% of fee 2,4* 2,4 2,4 0 0
TOTAL 281,9 116,4 96,3 168,9 56,0
* Not included in total revenue as it will be eliminated on
consolidation.
The figures in the table above have been extracted, without
adjustment, from the annual financial statements of the relevant
entities for the financial year ended 31 March 2006. It should be
noted that these figures are prior to any adjustments by Peermont
Global which may be required in respect of its accounting policies.
3. GAMBLING BOARDS" APPROVAL OF THE TUSK TRANSACTION
The various gambling boards have approved the Tusk transaction,
subject to, inter alia, the conditions detailed below.
3.1 North West Gambling Board
The existing Tusk Resorts Staff Trust (which currently has a 10%
interest in Tusk Resorts) is to acquire a 10% interest in TCHM.
PGTH shall facilitate the funding of the above acquisition by the
Tusk Resorts Staff Trust.
In addition to the shares to be held by the Tusk Resorts Staff
Trust, PGTH shall, within 18 months, introduce a minimum of 10%
broad based black economic empowerment shareholding at a purchase
consideration based on the purchase consideration of the Tusk
transaction, escalating by the carrying costs of PGTH. The
proposed empowerment shareholders shall include persons resident
in the North West Province (local empowerment shareholders).
3.2 Northern Province Gambling Board
PGTH is required to find provincial empowerment partners to hold
not less than 10% of Tusk Venda within 12 months from 1 August
2006.
3.3 KwaZulu-Natal Gambling Board
The shareholding in Emanzini held by previously disadvantaged
individuals ("PDI"s") in Emanzini and TCHM B shall not be less
than 26%.
A shareholding of at least 10% in Emanzini shall be offered for
purchase to local PDI"s.
PGTH is required to facilitate the funding required by a staff
trust to acquire a 15% interest in Emanzini and 10% in TCHM B.
4. BLACK EMPOWERMENT TRANSACTIONS
In addition to the Tusk transaction, two further transactions have
been concluded with PGTH in order to meet its black economic
empowerment ("BEE") objectives and restructure the BEE shareholding
within the Tusk Resorts Group. These transactions do not require
shareholder approval and are not categorised transactions in terms of
the Listings Requirements of the JSE Limited. The details of these
transactions are set out below for information purposes only.
4.1 MIC LEISURE (PROPRIETARY) LIMITED"S ("MIC") ACQUISITION OF 21%
INTEREST IN PGTH ("THE MIC TRANSACTION")
4.1.1 Introduction
Peermont Global, MIC and PGTH entered into a
shareholders" agreement ("the PGTH shareholders"
agreement") on 5 June 2006, which will become effective
once all conditions precedent to the MIC transaction
have been fulfilled. In terms of the PGTH
shareholders" agreement:
MIC will subscribe for 21% in the issued share capital
of PGTH at a par value of 0,1 cent per PGTH share and
simultaneously advance an initial amount to PGTH on
loan account, which amount will be approximately R120
million and will be based on the pro rata purchase
consideration plus escalations and costs of the Tusk
transaction, the Emanzini transaction (set out in
paragraph 2.4 above), and the Gottam transaction (set
out in paragraph 4.2 below); and
MIC may thereafter dispose of an equity stake of up to
4.2% in PGTH to the Marang National Investors, being 5
black individuals.
4.1.2 Suspensive conditions
The PGTH shareholders" agreement is conditional upon
the approval of the MIC transaction on terms acceptable
to MIC and Peermont Global by the competition
authorities (if required) and the respective gambling
boards. The MIC transaction has been approved by the
North West and KwaZulu-Natal Gambling Boards, subject
to the completion of all relevant probity
investigations. The Limpopo Gambling Board has yet to
approve the MIC transaction.
4.2 GOTTAM INVESTMENTS (PROPRIETARY) LIMITED ("GOTTAM") TRANSACTION
4.2.1 Introduction
Gottam owns 20% of the issued share capital of Tusk
Resorts. PGTH has entered into an agreement to acquire
Gottam"s shares and claims in Tusk Resorts on
comparable terms and conditions to those extended to
Tusk sellers as advised in the announcement published
on 21 December 2005 ("the Gottam transaction").
Gottam transaction
R
Agreed price at 76 061 588
31 March 2006
Less: Retentions* (4 180 482)
Plus: Escalations from 1 774 830
1 April 2006 to 21 August
2006
Total payable on 21 August 73 655 936
2006
* Retentions are security for warranties given by
Gottam and escalate at 7% from 1 April 2006 to the
extent that they are no longer required and are
then paid to the relevant Gottam sellers.
The purchase consideration for the Gottam transaction will
be adjusted in accordance with the Taung Agterskot mechanism
referred to in paragraph 2.2 above. The agreements relating
to the disposal of Tusk Taung have been signed but are
subject to certain conditions precedent. If these conditions
precedent are fulfilled by 31 March 2007, an approximate
amount of R2.1 million, calculated as at 31 March 2006, will
become payable to Gottam. The Tusk Taung purchase
consideration will escalate by 7% per annum from 1 April
2006 until the date of payment of the agterskot amount.
4.2.2 Suspensive condition
The Gottam transaction is conditional upon the approval
of the MIC transaction by the respective gambling
boards having jurisdiction over the affairs of Tusk
Resorts.
Bryanston
16 August 2006
Investment bank and sponsor
Standard Bank
Date: 16/08/2006 12:15:49 PM Produced by the JSE SENS Department
