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GPL - Grand Parade Investments Limited - Buy-out of minority stakes in Thuo
Gaming South Africa (Pty) Ltd ("Thuo SA") and Thuo Gaming Western Cape (Pty) Ltd
("THUO WC") and the acquisition of an additional stake in Worcester Casino (Pty)
Ltd ("Worcester Casino")
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")
BUY-OUT OF MINORITY STAKES IN THUO GAMING SOUTH AFRICA (PTY) LTD ("THUO SA") AND
THUO GAMING WESTERN CAPE (PTY) LTD ("THUO WC") AND THE ACQUISITION OF AN
ADDITIONAL STAKE IN WORCESTER CASINO (PTY) LTD ("WORCESTER CASINO")
1. INTRODUCTION
1.1 Shareholders are hereby advised that GPI, through its 100% held subsidiary
GPI Slots (Pty) Ltd ("GPI Slots"), has entered into a Sale of Shares
Agreement, dated 15 April 2010, which allows it to purchase the following
assets as part of a single transaction ("the Acquisition"):
1.1.1 the remaining 10.0% stake in Thuo SA that GPI Slots has not
already agreed to acquire ("the Thuo SA acquisition") through the
acquisition of 100% of the shares in and loan claims against
Business Venture Investments 967 (Pty) Ltd ("BVI 967");
1.1.2 the remaining 4.9% stake of Thuo WC that GPI Slots does not
already own or has not already agreed to acquire ("the Thuo WC
acquisition") through the acquisition of 100% of the shares in
and loan claims against Slots Solutions (Pty) Ltd ("Slots
Solutions"); and
1.1.3 a 7.72% stake in Worcester Casino ("the Worcester Casino
acquisition") through the acquisition of 100% of the shares in
and loan claims against Stripe Investments 7 (Pty) Ltd
("Stripe").
1.2 Shareholders are referred to the SENS announcement on 2 November 2009 ("the
SENS announcement"), which detailed the acquisition by GPI Slots of
Carentan Investments (Pty) Ltd ("Carentan"), from Tatts Group Limited ("the
Carentan acquisition"). As a result of the Carentan acquisition, GPI
(through its subsidiary, GPI Slots) acquired 90% of Thuo SA, including Thuo
SA`s 70% interest in Thuo WC and 70% interest in Thuo Gaming Kwazulu-Natal
(Pty) Ltd ("Thuo KZN"). The effect of the Thuo SA acquisition and the Thuo
WC acquisition will be to increase GPI Slots`s direct and indirect
shareholdings in Thuo SA and Thuo WC to 100% (the latter as a result of GPI
Slots already having a direct 25.1% stake in Thuo WC prior to the Carentan
acquisition).
It is GPI`s intention to restructure the Carentan group upon completion of
the Carentan acquisition. The Thuo SA and Thuo WC acquisitions will assist
in this regard as they will result in all of the shares in the underlying
operating companies being held directly by GPI Slots.
1.3 The effect of the Worcester Casino acquisition will be that GPI will
directly own 46.3% of Worcester Casino.
1.4 The Acquisition referred to in 1.1 above constitutes a small related party
transaction in terms of the Listings Requirements of the JSE Limited
("JSE"). This announcement is therefore for information purposes only and
no action is required by GPI shareholders with regards to the Acquisition.
2. DETAILS OF THE BUSINESS OF BVI 967, SLOTS SOLUTIONS AND STRIPE
BVI 967 is an investment holding company created to hold a 10% stake in
Thuo SA. As outlined in more detail in the SENS announcement, Thuo SA was
established to hold interests in companies that submitted bids for Limited
Payout Machine ("LPM") gaming licenses in various provinces in South
Africa, and to house certain centralised services for the bid companies.
To date, Thuo WC and Thuo KZN are the only operating subsidiaries of Thuo
SA, each having been granted permission to operate 1 000 LPMs in their
respective provinces.
Slots Solutions is an investment holding company created to hold a 4.9%
stake in Thuo WC.
Stripe is an investment holding company created to hold a 7.72% stake in
Worcester Casino.
3. RATIONALE FOR THE ACQUISITION
The acquisition of the remaining interests in Thuo SA and Thuo WC enables
GPI to ultimately realise the full value of these subsidiaries. GPI
management believes this will add significant value to the GPI group, as
outlined in more detail in the SENS announcement. With the removal of these
minority shareholdings, GPI`s management and governance of Thuo SA and its
subsidiaries will be streamlined. This will go some way in facilitating any
potential restructuring of Carentan.
The acquisition of the additional interest in Worcester Casino allows GPI
to consolidate its position within this investment. Worcester Casino is
regarded as a key asset in GPI`s investment portfolio.
Further, the Acquisition eliminates any possible conflict of interests that
may have otherwise arisen as a result of GPI directors and their related
parties owning stakes in these assets, as is discussed in more detail
below.
4. RELATED PARTY TRANSACTION
4.1 The vendors of BVI 967, Slots Solutions and Stripe include Mr Alexander
Abercrombie, a director of GPI, and Nadesons Investments (Pty) Ltd
("Nadesons Investments"). Nadesons Investments is effectively controlled
by Mr Hassen Adams, a director of GPI. In terms of the Listings
Requirements of the JSE, the Acquisition is therefore regarded as a small
related party transaction and requires written confirmation from an
independent expert confirming the fairness of the terms of the Acquisition
to GPI shareholders.
4.2 Accordingly, GPI has appointed Mazars Corporate Finance (Pty) Ltd
("Mazars"), as the independent expert in accordance with paragraph 10.7(b)
of the JSE Listings Requirements.
Mazars has provided the JSE with written confirmation that the terms of the
Acquisition are fair to GPI shareholders. The fairness opinion will lie
open for inspection at the registered office of GPI for a period of 28 days
from the date of publication of this announcement.
5. PARTICULARS OF THE ACQUISITION
5.1 Subject-matter of the Acquisition
The subject-matter of the Acquisition is 100% of the issued share capital
in BVI 967, Slots Solutions and Stripe.
5.2 The vendors
The vendors of BVI 967 are Nadesons Investments (60% shareholding)
(effectively controlled by Mr Hassen Adams) and Mr Alexander Abercrombie
(40% shareholding). The vendors of Slots Solutions are Nadesons
Investments (53% shareholding), Mr Alexander Abercrombie (27% shareholding)
and Ms Hampton (20% shareholding). The vendors of Stripe are Nadesons
Investments (70% shareholding) and Mr Alexander Abercrombie (30%
shareholding).
5.3 The effective date
The effective date of the Acquisition is 1 July 2009.
5.4 Purchase consideration
The purchase consideration for the entire issued share capital in BVI 967,
Slots Solutions and Stripe is R21 560 000 escalating at the prime overdraft
rate, on R17 700 000 thereof, payable in cash.
5.5 Suspensive conditions
The Acquisition is subject to the Carentan acquisition becoming
unconditional and approval from the provincial gambling boards of the
provinces in which each Carentan subsidiary company is a licensee.
5.6 Other
GPI will undertake to ensure that the articles of association of BVI 967,
Slots Solutions and Stripe are amended to comply with schedule 10 of the
Listings Requirements of the JSE, should such amendments be required.
Cape Town
5 May 2010
Sponsor: PSG Capital (Pty) Limited
Corporate advisor: Leaf Capital (Pty) Ltd
Independent expert: Mazars Corporate Finance (Pty) Ltd
Legal advisor: Bernadt Vukic Potash & Getz Attorneys
Date: 05/05/2010 17:30:07 Supplied by www.sharenet.co.za
Produced by the JSE SENS Department.
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JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
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