TSOGO SUN HOLDINGS LIMITED - Announcement in relation to the Listing and Unbundling of Tsogo Sun Hotels Limited

Release Date: 15/03/2019 14:00
Code(s): TSH
 
Wrap Text
Announcement in relation to the Listing and Unbundling of Tsogo Sun Hotels Limited

TSOGO SUN HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration No. 1989/002108/06)
JSE Share Code: TSH
ISIN: ZAE000156238
("Tsogo Sun" )


ANNOUNCEMENT IN RELATION TO THE LISTING AND UNBUNDLING OF TSOGO SUN
HOTELS LIMITED (“THL”) AND CONSEQUENTIAL CHANGES IN MANAGEMENT AND
DIRECTORATE


     1.INTRODUCTION

    1.1  The board of directors of Tsogo Sun (“Board”) is pleased to announce that in order to
         allow shareholders of Tsogo Sun (“Shareholders”) to directly participate in the gaming
         and hotel divisions of Tsogo Sun, it has resolved to restructure the Tsogo Sun Group’s
         (“Group”) hotel interests under one holding company, being THL, and to proceed with
         the separation of Tsogo Sun and THL, culminating in the listing and unbundling of
         THL.

    1.2  Tsogo Sun proposes to implement the separation by listing THL on the main board of
         the JSE Limited (“JSE”) (the “Listing”), and the subsequent distribution in specie by
         Tsogo Sun of its entire holding of THL shares to Shareholders, pro rata to their
         respective holdings of Tsogo Sun ordinary shares (the “Unbundling”) (collectively the
         “Proposed Transaction”).

    1.3  Subsequent to the successful implementation of the Proposed Transaction, Tsogo
         Sun will comprise only of the gaming division, being casino and alternative gaming
         operations. The intention is to change the name of Tsogo Sun from “Tsogo Sun
         Holdings Limited” to “Tsogo Sun Gaming Limited” in due course.

    1.4  THL owns, leases and manages hotels in South Africa as well as several sub-Saharan
         countries, the Seychelles and Abu Dhabi. THL will also hold the Group’s minority
         investment in RBH Hospitality Management and International Hotel Properties, based
         in the United Kingdom. The hotels that have been developed as part of the various
         casino complexes owned by the Group will remain with Tsogo Sun and be operated
         under a management agreement by THL. The Group’s 59.2% interest in Hospitality
         Property Fund Ltd (“HPF”) will remain owned and consolidated by THL.

    1.5  The successful completion of the Proposed Transaction will be subject to, inter alia,
         the fulfilment of suspensive conditions including, inter alia, approval by the relevant
         regulatory authorities.

    2. RATIONALE FOR THE PROPOSED TRANSACTION

     2.1  Following the acquisition by Tsogo Sun of a controlling interest in HPF, the hotel
          division has reached critical mass. Given that the gaming and hotel divisions operate
          in distinctly different markets and service different customers there are limited
          opportunities to leverage synergies within the Group as a whole.

     2.2 The separation of the Group into two focused entities will provide Shareholders with
         greater investment choice and the ability to manage their exposure to gaming and
         hotel operations respectively. It is also envisaged that the separate listing of THL will
         provide Shareholders with transparent disclosure relating to the operations of the hotel
         division and allow for the valuation of THL without discounting for gaming-related
         regulatory risks.

     2.3 Tsogo Sun and THL will enter into a shared services agreement which will govern the
         continued availability of essential services currently provided by the Group and the
         allocation of costs relating to shared service departments in order to ensure that the
         separation of the gaming and hotel divisions does not result in the duplication of central
         cost structures.

    3. CHANGES IN MANAGEMENT AND DIRECTORATE

     3.1  The composition of the board of directors of THL (“THL Board”) will be set out in the
          THL pre-listing statement (“PLS”) as well as the abridged PLS announcement and will
          include Mr Marcel von Aulock as Chief Executive Officer (“CEO”) and Mrs Laurelle
          McDonald as Chief Financial Officer (“CFO”). Mrs McDonald is currently the Group
          Corporate Finance Manager of Tsogo Sun and has been with Tsogo Sun for twelve
          years.

     3.2  Mr John Copelyn will chair the THL Board and Mr Mohammed Ahmed is expected to
          be appointed as lead independent director and Chairman of the Audit Committee of
          THL, with the balance of the THL Board being comprised of a suitable combination of
          non-executive and Independent non-executive directors.

     3.3   As a consequence of HPF remaining a subsidiary of THL and concentrating primarily
           on hotel investments, Mr Rob Nicolella will be stepping down as CEO of HPF
           reassuming his previous position at Hosken Consolidated Investments Limited once
           the Proposed Transaction is complete but will remain a non-executive director of HPF.
           Mrs Mara De Lima, who has been the CFO of HPF for the past two years will be
           appointed as CEO at that point. Mr Riaan Erasmus will be appointed to the board of
           HPF as CFO to replace Mrs de Lima. Mr Erasmus has previously held the position of
           Group Financial Manager at HPF and acting CFO prior to the takeover of HPF by
           Tsogo Sun. The board of HPF will be reconstituted and Shareholders are referred to
           the HPF announcement released on the Stock Exchange News Service of the JSE
           today, for further details.

     3.4   In terms of paragraph 3.59 of the Listings Requirements of the JSE, Tsogo Sun
           announces the retirement of Mr Jacques Booysen as CEO and as a member of the
           boards of directors of the Group companies, with effect from 30 June 2019. Mr
           Booysen has served in various capacities within the management of Tsogo Sun for
           some 12 years and has led the Group as CEO for the past two years. The Board
           wishes Mr Booysen every success in the future and expresses its thanks for his
           service to the Group.

     3.5   The Board is pleased to advise that it has resolved to appoint Mr Chris du Toit as Chief
           Executive Officer – Designate, effective 01 July 2019. Mr du Toit is a Chartered
           Accountant (SA) and is presently the Chief Operations Officer – Alternative Gaming
           and Chief Executive Officer - Galaxy Bingo (which latter position he has held for the
           past 10 years). The Board congratulates Mr du Toit on his appointment.

    3.6    Further changes that may be made to the Board as a result of the Proposed
           Transaction will be announced once finalised.

    4. NEXT STEP AND PROPOSED TIMELINES

     4.1   The PLS for THL is expected to be released on or about 22 May 2019 with the Listing
           of THL expected to occur on or about 11 June 2019. Shareholders will be kept
           informed in this regard.



Fourways

15 March 2019
Financial Advisor and Transaction Sponsor
The Standard Bank of South Africa Limited


Corporate Law Advisors to Tsogo
Taback and Associates Proprietary Limited


Sponsor
Investec Bank Limited

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