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Pro Forma Financial Effects Relating To The Sunwest And Worcester Transaction And Withdrawal Of Cautionary
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")
PRO FORMA FINANCIAL EFFECTS RELATING TO THE SUNWEST AND
WORCESTER TRANSACTION AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
1. INTRODUCTION
Shareholders of Grand Parade Investments Limited (“GPI”) are
referred to the terms announcement released on SENS on Monday,
4 April 2016 (“the Announcement”) relating to the disposal by
GPI and Sun International Limited of a 10% interest each in
SunWest International Proprietary Limited (“SunWest”) (in the
case of GPI a 10% economic interest and 19.96% voting
interest) and a 10% interest each in Worcester Casino
Proprietary Limited (“Worcester”) to Tsogo Sun Gaming
Proprietary Limited (“the Transaction”).
In accordance with the Announcement, the outstanding pro forma
financial effects of the Transaction is disclosed below.
2. PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTION
The consolidated pro forma financial effects of the
Transaction, as set out below, are the responsibility of the
directors. The consolidated pro forma financial effects are
presented in a manner consistent with the basis on which the
historical financial information has been prepared and in
terms of the Company’s accounting policies. The pro forma
financial effects have been presented for illustrative
purposes only and, because of their nature, may not give a
fair reflection of the Company’s financial position post the
implementation of the Transaction.
The table below sets out the pro forma financial effects of
the adjustments on the Company, based on the interim financial
results for the six months ended 31 December 2015 and on the
assumption that, for calculating the net asset value per GPI
share and net tangible asset value per GPI share, the
adjustments were effected on 31 December 2015. In respect of
the earnings per GPI share and headline earnings per GPI share
it is assumed that the adjustments were effected on 1 July
2015.
Results for Change
the six Pro forma (%)
months ended results
31 December after the
2015 Transaction
Net asset value per share
(cents) 492 524 7%
Net tangible net asset
value per share (cents) 468 500 7%
Earnings per share
(cents) 5.67 37.46 561%
Headline earnings per
share (cents) 2.05 1.15 (44%)
Number of shares in issue
(‘000)(excluding treasury
shares) 472,971 472,971 -
Weighted number of shares
in issue (‘000) (excluding
treasury shares) 471,584 471,584 -
ASSUMPTIONS:
The following assumptions have been used determination of the
pro forma results:
a) The hurdle rates used to determine the cash payments, for
the disposal of 10% of SunWest and Worcester respectively,
have been met and no adjustment to the ppurchase
consideration of R 675.0 million has been made. Based on
the current performance of SunWest and Worcester, GPI
management’s view is that it is unlikely there will be a
significant adjustment to the purchase consideration.
b) The capital contribution to Worcester of R 30.1 million,
which took place during October 2015, is included in the
unadjusted and unaudited results for the six months ended
31 December 2015; however, this has not been taken into
account in the determination of the profit on sale
recognised as an adjustment to the statement of
comprehensive income.
c) GPI’s management is currently negotiating with its funders
to restructure certain of its debt facilities and it is
their intention to utilise the cash received from the
Transaction to reduce existing debt facilities by
R 172.6 million over 18 equal monthly repayments of R 9.59
million thereafter. The aforementioned is subject to the
approval of the relevant lenders.
d) The CGT base cost of the 10% holding in SunWest is R 208.0
million.
e) The CGT base cost of the 10% holding in Worcester is R 47.7
million.
f) Imputed interest on deferred payments has been calculated
using GPI’s primary lending rate of 9.49%.
g) Where applicable the tax rate has been assumed at 28% for
income tax and 18.67% for CGT. It has also been assumed
that taxes will be payable at the end of the financial
year, in June 2016, and have therefore been recognised as a
payable under current liabilities in the statement of
financial position.
h) The disposal of Worcester and SunWest took place on 1 July
2015 when determining the effect of the Transaction on the
statement of comprehensive income.
i) The disposal of Worcester and SunWest took place on 31
December 2015 when determining the effect of the
Transaction on the statement of financial position.
j) The breakdown of the purchase consideration can be analysed
as follows:
SunWest Worcester Total
Net Transaction 642 461 538 32 538 462 675 000 000
proceeds (tax
consideration)
Imputed interest (36 640 426) (1 855 711) (38 496 137)
Accounting 605 821 112 30 682 750 636 503 863
consideration
k) Shareholders are advised that the full and complete notes
to pro forma financial effects will be included in the
circular to shareholders.
3. WITHDRAWAL OF CAUTIONARY
Shareholders are referred to the cautionary announcement
included in the Announcement and are hereby advised that since
the pro forma financial effects relating to the Transaction
have been disclosed in this announcement, caution is no longer
required to be exercised by shareholders when dealing in the
Company’s securities.
Cape Town
10 May 2016
Legal Advisor to GPI
Bernadt Vukic Potash & Getz
Sponsor & Transaction Advisor
PSG Capital
Date: 10/05/2016 05:02:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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