GRAND PARADE INVESTMENTS LIMITED - Specific Issue To GPI Womens BBBEE Empowerment Trust

Specific Issue To GPI Women’s BBBEE Empowerment Trust

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”)

SPECIFIC ISSUE TO GPI WOMEN’S BBBEE EMPOWERMENT TRUST

Shareholders are referred to the circular distributed to
shareholders on 8 November 2013 (“Circular”) and to the
shareholders meeting held on 11 December 2013 (“General
Meeting”).

In terms of the circular:

  •   GPI was to undertake a specific issue of shares for cash to
      a broad-based black economic empowerment trust known as the
      GPI Women’s Empowerment Trust (“Trust”) to the value of R60
      million (“BEE Specific Issue”);

  •   GPI was to provide funding to a special purpose vehicle
      subsidiary company of GPI (“SPV”) in the amount of R100
      million, by way of subscribing for preference shares in the
      SPV, which SPV would then make a capital contribution to
      the Trust (“BEE Funding”);

  •   The BEE Funding was to be used by the Trust to fund the BEE
      Specific Issue and to acquire further GPI shares in the open
      market to the value of R40 million (“BEE   Share
      Acquisition”); and

  •   the Trust was to pledge the shares from the BEE Specific
      Issue and the BEE Share Acquisition to the SPV as security
      for the capital contribution (“Pledge”).

The above transaction was approved by shareholders at the General
Meeting.

When the BEE Specific Issue was implemented in May 2014, and due
to an administrative error, GPI provided a direct loan to the
Trust (to the value of R60 million) (“Loan Funding”) instead of
providing the funding via the preference share structure in the
SPV in accordance with the shareholder approval.

Furthermore, after the BEE Specific Issue was implemented but
before a decision was taken to proceed with the BEE Share
Acquisition (it being noted no specific timeframe for
implementing the BEE Share Acquisition was specified in the
circular), GPI performed its annual BEE verification, the results
of which indicated that the BEE Specific Issue had assisted GPI
in reaching its targeted level of black ownership. As such the
implementation of the BEE Share Acquisition was no longer
required for GPI to further increase its black ownership.

Accordingly, the transaction that was implemented deviated from
the transaction approved by shareholders in that:

  •   the Loan Funding was provided in lieu of the BEE Funding
      and only for the amount required by the BEE Specific Issue;

  •   the BEE Share Acquisition did not take place; and

  •   The Pledge was not provided.

When GPI became aware of the oversight, GPI sought legal advice
on an appropriate path forward. As part of the same process, GPI
also reviewed the structure as implemented and identified that
there is no material commercial difference between the interest
free loan and the preference share structure approved by
shareholders and that, as such, shareholders of GPI have not been
financially prejudiced by the structure as implemented.

Following consultation with the JSE, GPI subsequently implemented
the BEE Funding structure as originally approved by shareholders
for the amount required by the BEE Specific Issue and the Trust
provided the Pledge in respect of the BEE Specific Issue shares.
However, GPI has decided that it will not implement the BEE Share
Acquisition as there is no obligation on GPI to do so and GPI
has a satisfactory level of black ownership. In light of this,
GPI is of the view that the capital will be better allocated in
furtherance of its stated objective to increase its investments
in the food sector.

Cape Town
14 November 2017

Sponsor:
PSG Capital

Date: 14/11/2017 05:30:00 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.