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GRAND PARADE INVESTMENTS LIMITED - Disposal Of Rental Enterprise At 33 Heerengracht

Release Date: 15/03/2018 17:17
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Disposal Of Rental Enterprise At 33 Heerengracht

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”)

DISPOSAL OF RENTAL ENTERPRISE AT 33 HEERENGRACHT

1.     INTRODUCTION

       Shareholders are hereby advised that the Company’s subsidiary, GPI Properties
       Proprietary Limited (“Seller”), has entered into a sale agreement (“the Agreement”) with
       Ballesteros Properties Proprietary Limited (“Purchaser”) on 15 March 2018 (“Signature
       Date”). In terms of the Agreement, the Seller will dispose of the property known as 33
       Heerengracht Street, being Erf 110 Cape Town, measuring 668 square metres and held
       by the Seller under deed of transfer T48609/2012 (“the Property”) and the rental
       enterprise conducted by the Seller on the Property (“Rental Enterprise”), as a going
       concern (“the Disposal”).

2.     RATIONALE FOR THE DISPOSAL

       In line with GPI’s strategy to dispose of non-core assets, the Property is in the process
       of being sold. This is in line with GPI’s focus on reducing head office costs. The building
       is currently being underutilised in terms of GPI’s requirements. Management and the
       board of GPI are of the view that the Disposal will unlock capital which will be better
       utilised across the GPI group.

3.     PURCHASE CONSIDERATION

3.1.      In terms of the Agreement, the purchase consideration for the Rental Enterprise,
          including the Property, is an amount of R225 000 000 which includes value added
          tax at the rate of zero percent (“Purchase Consideration”).

3.2.      A deposit of 10% of the Purchase Consideration is payable by the Purchaser to the
          transferring attorneys to be held by them in an interest-bearing trust account for the
          benefit of the Purchaser. The deposit amount and the remaining balance of the
          Purchase Consideration is payable by the Purchaser to the Seller on the date of
          registration of transfer of the Property into the name of the Purchaser (“Transfer
          Date”).

3.3.      The Purchaser will provide the Seller with normal guarantees for the payment of the
          Purchase Consideration.

4.    APPLICATION OF THE PURCHASE CONSIDERATION

      The proceeds of the Purchase Consideration will be applied by the Seller towards the
      payment of agent’s commission, repayment of debt, and the furthering of investment in
      businesses.

5.     CONDITIONS PRECEDENT

5.1.      The Disposal is subject to the fulfilment or waiver (to the extent applicable) of the
          following outstanding conditions precedent, namely that:

5.1.1.        within 15 days from the Signature Date (“DD Period”), the Purchaser completes a
              due diligence to its satisfaction and provides the Seller with a letter confirming that
              it is satisfied with the outcome of such due diligence; and

5.1.2.        not later than 1 business day after the expiry of the DD Period:

5.1.2.1.             an existing lease agreement with Burger King in respect of part of the
                     Property is amended to the satisfaction of the Purchaser and Burger King,
                     provided that the term of such lease shall not be less than 5 years from the
                     Transfer Date, with a right to renew the lease for a further 5 years;

5.1.2.2.             existing lease agreements with various GPI entities in respect of part of the
                     Property are amended to the satisfaction of the Purchaser and the relevant
                     GPI entities, in terms of which the GPI entities shall occupy certain floors of
                     the Property and be able to use various parking bays, provided that the term
                     of such leases shall not be less than 3 years from the Transfer Date, with a
                     right to renew the lease for a further 5 years;

5.1.2.3.             all other existing lease agreements in respect of the Property are amended
                     to the satisfaction of the Purchaser;

5.1.2.4.             the Seller provides to the Purchaser an undertaking to secure and register
                     a servitude which extends from the adjacent building, known as “the Onyx”,
                     to the Property in favour of GPI and the Purchaser;

5.1.2.5.             the board of directors of the Seller approves the Disposal;

5.1.2.6.             the board of directors of the Purchaser approves the Disposal; and

5.1.2.7.             the shareholders of the Seller adopt a special resolution in terms of section
                     112 read with section 115(5) of the Companies Act, No. 71 of 2008,
                     approving the Disposal.

5.2.       The conditions precedent referred to in paragraphs 5.1.1 to 5.1.2.5 are for the benefit
           of the Seller, who shall be entitled to waive fulfilment of any such condition precedent.
           The condition precedent referred to in paragraph 5.1.2.6 are for the benefit of the
           Purchaser, who shall be entitled to waive fulfilment of such condition precedent. The
           condition precedent referred to in paragraph 5.1.2.7 cannot be waived.

6.       EFFECTIVE DATE

         The Disposal will become effective on the Transfer Date, anticipated to be no later than
         30 June 2018.

7.       WARRANTIES AND OTHER MATERIAL TERMS

7.1.       The Agreement contains warranties by the Seller in favour of the Purchaser which
           are standard for a transaction of this nature (“Warranties”).

7.2.       Subject to such Warranties, the Rental Enterprise is sold “voetstoots”.

8.   FINANCIAL INFORMATION IN RELATION TO THE THE RENTAL ENTERPRISE

     In terms of the latest audited annual financial statements of GPI for the year ended
     30 June 2017 prepared in accordance with the International Financial Reporting
     Standards and in the manner required by the Companies Act No. 71 of 2008, the value
     of the net assets being disposed of (the Rental Enterprise) amounts to R 101 930 252,
     while the distributable profit after tax of the Rental Enterprise amounts to R 1 027 992
     for the same period.

9.   CATEGORISATION

     The Disposal constitutes a Category 2 transaction in terms of the JSE Listings
     Requirements.


Cape Town
15 March 2018

Sponsor
PSG Capital

Legal Advisor
Cliffe Dekker Hofmeyr Inc

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