Wrap Text
Sale of Shares Agreement between Southern Sun Africa and Kasada Albatross Holding
Tsogo Sun Hotels Limited
Incorporated in the Republic of South Africa
Registration number 2002/006356/06
Share Code: TGO ISIN: ZAE000272522
(“Tsogo Sun Hotels” or “the Group” or “the Company”)
SALE OF SHARES AGREEMENT BETWEEN SOUTHERN SUN AFRICA AND KASADA ALBATROSS HOLDING
1. INTRODUCTION
Shareholders are advised that the Company’s wholly owned subsidiary, Southern Sun Africa (“SSA”) has entered into
a sale of shares agreement (the “Sale Agreement”) with Kasada Albatross Holding (the “Purchaser”), which is a
subsidiary of Kasada Hospitality Fund LP. In terms of the Sale Agreement, SSA will dispose of all of its shares (the
“Sale Shares”) in its wholly owned subsidiary, SS Ikoyi Holdings (“SSIH”) together with all shareholder loan claims
(the “Sale Claims”) against Ikoyi Hotels Limited (“IHL”) to the Purchaser (collectively, the “Disposal”). SSIH holds the
Company’s entire interest in IHL, comprising 75.55% of the issued shares of IHL.
2. DISPOSAL CONSIDERATION
The aggregate disposal consideration is US$30.4 million, comprised of US$29.1 million for the Sale Shares and US$1.3
million for the Sale Claims (together the “Disposal Consideration”), which may be adjusted by the difference in the
net debt of IHL (“Net Debt”) between the date of signature and the effective date, provided that no such adjustment
will result in the aggregate consideration received by SSA exceeding 30% of the Company’s market capitalization.
Net Debt is determined as the external debt of IHL, which currently has a face value of approximately US$12.8 million
(the “External Debt”) plus debt equivalents of US$3.0 million (including inter alia trade and other payables,
provisions, and the face value of the Sale Claims) less cash and cash equivalents of US$5.2 million (including inter
alia trade and other receivables, inventory and the face value of the Sale Claims). In addition, the Purchaser will
assume or otherwise procure the release of the Company and its subsidiaries from its obligations in respect of the
External Debt of IHL.
3. DESCRIPTION OF IHL
IHL was incorporated in 2002 under the laws of Nigeria and owns the Southern Sun Ikoyi hotel located at No. 47
Alfred Rewane Road, Ikoyi, Lagos, Nigeria. SSA has managed the 181-bedroom hotel since 29 January 2009 and
acquired its 75.55% interest in IHL on 29 June 2013.
4. RATIONALE FOR THE DISPOSAL
The stated intention of the Group since its separate listing has been to reduce its US dollar denominated interest-
bearing debt (the “Offshore Debt”). COVID-19 has limited the Group’s ability to apply its cash resources towards the
settlement of this debt. The Disposal Consideration allows the Group to achieve this objective and to divest from its
shareholding in IHL which is an acceptable outcome. The successful implementation of the Disposal would result in
the reduction of Offshore Debt through the deconsolidation of IHL’s External Debt of US$12.8 million and provides
SSA with sufficient cash resources to offset Offshore Debt in Mozambique amounting to US$26.6 million, thereby
eliminating the forex risk to the Group.
5. APPLICATION OF THE DISPOSAL CONSIDERATION
The cash proceeds from the Disposal Consideration will be applied towards the settlement of SSA’s Offshore Debt of
US$6.4 million with the balance used to offset the Offshore Debt balances in Mozambique which as at the date
hereof amounts to US$26.6 million.
6. EFFECTIVE DATE OF THE DISPOSAL
The Disposal is subject the fulfilment (or waiver) of inter alia, the following conditions precedent (“Conditions
Precedent”):
6.1. the Federal Competition and Consumer Protection Commission (“FCCPC”) in Nigeria unconditionally
approves the implementation of the sale of the Sale Shares from the Seller to the Purchaser, or if
conditionally approved, the Parties accept the relevant conditions;
6.2. the Hotel Management Agreement concluded between SSA and Ikoyi Hotels Ltd being fully and finally
terminated with no claims against, or recourse, to Ikoyi Hotels Ltd after the completion date; and
6.3. Absa Limited (in its capacity as a third party provider of debt financing to IHL under the Absa Finance
Documents (“Absa”) has, to the extent required under the Absa Finance Documents, approved the sale of
the Sale Shares in writing, and agreed to release the Company, Southern Sun Hotel Interests (Pty) Ltd,
Southern Sun Offshore (Pty) Ltd and Tsogo Sun Investments (Pty) Ltd from all existing security and/or
encumbrances created in its favour relating to the Sale Shares.
Delivery and payment in terms of the Disposal shall be the last day of the month during which the last of the
Conditions Precent is fulfilled (“CP Satisfaction Date”) provided that if the CP Satisfaction Date falls on a date that is
not at least 20 (twenty) business days prior to the last day of a month, then the effective date shall fall on the last
day of the next month.
7. WARRANTIES AND OTHER SIGNIFICANT TERMS OF THE SALE AGREEMENT
The Sale Agreement provides for warranties, undertakings, indemnities and events of default that are normal for
transactions of this nature.
8. FINANCIAL INFORMATION
The value of the net assets of IHL was US$ 41.0 million as at 31 March 2022, being the date of the group’s reviewed
condensed consolidated financial statements for the year ended 31 March 2022 published on SENS on 26 May 2022.
The Group’s 75.55% share of IHL’s net asset value equates to US$ 31.0million
The attributable headline profit of IHL for the year to 31 March 2022, was US$0.7 million based on the reviewed
condensed consolidated financial statements published on SENS on 26 May 2022, which were prepared in terms of
IFRS.
9. CATEGORISATION
The Disposal constitutes a Category 2 transaction for the Group as contemplated in section 9 of the Listings
Requirements of the JSE Limited. Further announcements will be made in due course updating shareholders on the
status of the Disposal.
Fourways
26 May 2022
Sponsor: Investec Bank Limited
Legal advisor: ENSafrica
Date: 26-05-2022 01:02:00
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.
Sharenet Sites 
