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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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