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GRAND PARADE INVESTMENTS LIMITED - Pro Forma Financial Effects Relating To The Sunwest And Worcester Transaction And Withdrawal Of Cautionary

Release Date: 10/05/2016 17:02
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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'). 
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.

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