FAMOUS BRANDS LIMITED - Announcement relating to a small related party transaction

Announcement relating to a small related party transaction

Famous Brands Limited
(Incorporated in the Republic of South Africa)
(Registration number 1969/004875/06)
Share code: FBR
ISIN code: ZAE000053328
(“Famous Brands” or “the Company” or “the Group”)

ANNOUNCEMENT RELATING TO A SMALL RELATED PARTY TRANSACTION

1. Introduction, rationale and salient terms

  Shareholders of Famous Brands (“Shareholders”) are advised that
  Famous Brands Management Company Proprietary Limited (a wholly
  owned subsidiary of Famous Brands) (“the Lessee”) has entered into
  a lease agreement (“the Lease”) with Steers Properties Proprietary
  Limited (“Steers Properties”), represented by Mr John Halamandres
  (a director of Famous Brands), in respect of Erf. 664 Halfway House
  Extension 57 Township and Portion 561 of the Farm Waterval No. 5I.R
  situated at 478 James Crescent, Midrand 1685 (“the Premises”).

  The rental payable for the Lease, which will commence on 1 October
  2019 for a period of 5 years (“Lease Period”), will be R1 450 000.00
  per month (excluding Value Added Tax) (“Rental Amount”), payable
  monthly in advance from 1 October 2019 to 31 September 2020 with
  an escalation of 7.5% per annum.

  The Lessee has an option to renew the Lease for a further five
  years, at the end of the Lease Period.

  Famous Brands is Africa’s largest branded food services franchisor.
  The Company’s integrated supply chain consists of Manufacturing and
  Logistics operations which support the Brand business in South
  Africa and selected markets in the rest of Africa. The Premises
  remains a key part of the Group’s manufacturing and logistics
  operations.

  The Lease is not subject to the fulfilment of any conditions
  precedent.


2. Related party considerations

  The JSE Limited (“JSE”) has ruled that the Lease will be deemed to
  be a related party transaction in terms of the JSE Listings
  Requirements as a consequence of Mr   Halamandres being a director 
  of Famous Brands and Steers Properties
  and furthermore as a result of Messrs Johnny Halamandres,
  Panagiotis Halamandaris, Theofanis Halamandaris and Periklis
  Halamandaris (also representing Steers Properties) collectively
  owning more than 20% of the shares in Famous Brands.

  Based on the aggregated Rental Amount for the Lease Period of
  R101,066,003.67, the Lease will be deemed a small related party
  transaction in terms of Section 10.7 of the JSE Listings
  Requirements.

The board of directors of Famous Brands (“the Board”) is required
to provide the JSE with written confirmation from an independent
professional expert confirming that the terms of the Lease are fair
insofar as Shareholders are concerned.

BDO Corporate Finance Proprietary Limited (“BDO Corporate Finance”)
has been appointed as the independent professional expert by the
Board and provided the Board with a fairness opinion with regard
to the Lease (“Fairness Opinion”) in which they have advised the
Board that they believe that the terms of the Lease are fair to
Shareholders.

The Fairness Opinion will lie open for inspection at the registered
office of Famous Brands being 478 James Crescent, Midrand, Gauteng
for a period of 28 days from the date of this announcement.


Midrand
7 August 2019

Sponsor
The Standard Bank of South Africa Limited

Independent Expert
BDO Corporate Finance




                                                                  

Date: 07/08/2019 04:00:00
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