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GPL - Grand Parade Investments Limited - Exercise Of Sunwest International (Proprietary) Limited ("Sunwest") Share Option 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 OF SUNWEST INTERNATIONAL (PROPRIETARY) LIMITED ("SUNWEST") SHARE OPTION 1. INTRODUCTION 1.1 Shareholders are referred to annexure 12 of the GPI Pre-Listing Statement ("PLS") issued on 19 May 2008 and specifically to the details pertaining to the SunWest transaction set out therein. 1.2 As stated in the PLS, on 17 August 2007 GPI and SunWest concluded an agreement in terms whereof GPI was granted the option to subscribe for between 500 131 and 700 182 new "N" ordinary shares in SunWest ("Option Agreement") subject to GPI ensuring that between 25% and 35% of its issued share capital is beneficially held by black persons or black companies with such shares being in a lock-in structure until 2012. 1.3 Shareholders are hereby advised that GPI has duly exercised a portion of the option to subscribe for 560 000 new shares in SunWest ("the Transaction"), the details of which are as set out in this announcement. It is noted that it is the intention of GPI to take up the balance of the option as its locked-in black shareholding increases to 35%. GPI has until 29 June 2010 to exercise the balance of the option. 1.4 Shareholders are advised further that the exercise of the option constitutes a category 2 transaction in terms of the Listings Requirements of the JSE Limited. 2. PARTICULARS OF THE TRANSACTION 2.1 Subject of the Transaction The subject of the Transaction is 560 000 "N" ordinary shares in the share capital of SunWest. 2.2 Condition precedent The Transaction was subject to the condition precedent that between 25% to 35% of the share capital of GPI is beneficially held by black persons or black companies who agree, inter alia, 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 black persons or black companies. SunWest duly conducted an audit of GPI`s shareholding for purposes of verifying the fulfilment of the aforementioned condition precedent and has duly confirmed that it is satisfied with same to GPI. Accordingly the condition precedent was fulfilled yesterday, Tuesday 05 August 2008. 2.3 Purchase consideration GPI will subscribe for the additional 560 000 "N" ordinary shares in the share capital of SunWest at R165 per share for a total subscription consideration of R92.4 million, which amount has been settled in cash. 2.4 Call Option In the event that the number of locked-in GPI shareholders (being those shares held by black persons or black companies) reduces to below 25% before 30 June 2012 and the minimum percentage is not restored within an agreed specified time period, then SunWest shall have a call option to repurchase the additional 560 000 "N" ordinary shares subscribed for by GPI in terms of the Transaction. 3 RATIONALE FOR THE TRANSACTION The Transaction will increase GPI`s stake in SunWest from 26.41% to 29.24%. As more fully set out in paragraph 1.2 of the PLS, it has been GPI`s stated intention to increase its stake in SunWest to at least 30% (economic interest) in the immediate/short term and the Transaction forms part of achieving this stated intention. Due to the fact that the Transaction is accounted for at cost, the Transaction does not have a significant financial effect on GPI`s net asset value or net tangible asset value per share or on GPI`s earnings per share or headline earnings per share. Based on previous transactions that have taken place, the directors estimate the fair value of SunWest shares to be well in excess of the option price of R165 per share and that the Transaction is anticipated to have a positive impact on GPI`s financials in the coming years. 4. DETAILS OF THE BUSINESS OF SUNWEST SunWest is an investment holding company that holds the following major assets: 4.1 GrandWest Casino The GrandWest casino is undoubtedly the darling in Sun International Limited`s ("Sun") stable generating substantial returns since its establishment in 2001, outperforming all of its gaming peers in the Sun group. GrandWest`s turnover for the 2007 financial year was approximately R1.6 billion (R1.4 billion: 2006 and six months to December 2007: R879 million) while its closest rival, Sun City, showed revenues of just over R1 billion. With turnover generating an operating profit of R594 million for the 2007 financial year (R504 million: 2006 and R293 million for the six months to December 2007), GrandWest makes GPI`s continued and increased investment in SunWest an absolute imperative. 4.2 Table Bay Hotel Like GrandWest, it too is a SunWest asset that has shown remarkable performance in the buoyant inbound tourism market. Its 2007 financials show an increased average room occupancy of 72% (70%: 2006 and 72% in the six month period to December 2007) with an average room rate of R1 558 per room (an increase of 11% to the prior period; R1 609 average rate per room in the period to December 2007). EBITDA contribution of R63 million for the 2007 financial year represents an improvement of 21% to 2006 (EBITDA for the six months to December 2007 of R58 million). This is as a result of improved margins arising from the steady increase in tourist numbers. 4.3 Cape Town International Convention Centre ("CTICC") This is a world-class convention centre that, since its completion in 2003, has seen thousands of visitors across all walks of life attending consumer exhibitions, conferences and trade shows. The CTICC generated a turnover of R100 million for the year ended 30 June 2007. The fifth annual independent study on the impact of the CTICC showed that the CTICC contributed approximately R2,4 billion to South Africa`s Gross Domestic Product, resulting in the direct employment of nearly 3 796 people. 06 August 2008 Cape Town Sponsor PSG Capital (Pty) Limited Corporate adviser Leaf Capital (Pty) Limited Date: 06/08/2008 14:08:03 Supplied by www.sharenet.co.za 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.
