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Johannesburg - The listing of Grand Parade Investments (GPI) on the JSE on Friday marked the corporate maturity of a company founded out of nothing by the poor communities of Cape Town over a decade ago.
"Our shareholders walked for miles and stood in the hot sun waiting for their turn to invest their R1 000 (which was a minimum for 70cents/share in 1997)," said chairperson Hassen Adams. "We have unshackled ourselves from a BEE opportunity to a major corporate organisation."
Adams said the most significant part of GPI's story is that communities who forked money out of their own pockets founded it. "No one was given any shares," said Adams.
About 17 000 Cape Town community members put together the initial R28m investment that has over the years been transformed to about R2.5bn. "The communities have now matured into part of corporate South Africa. While GPI was conceived during the period of empowerment opportunity, it has now graduated to being a major corporate player.?"
The company was launched as an empowerment partner in the SunWest application for the Cape Metropole casino licence in 1999, in which it now holds an economic interest of about 30% and voting control.
Adams said the maturity of the company is demonstrated by the terms of the transaction in which GPI recently acquired a 23% stake in Real Africa Holdings for R450m.
"We've only paid in cash 15% of the transaction while the rest would be in GPI shares," said Adams. He said GPI has "sufficient resources" with which to make further acquisitions.
The company would be looking for dividend active opportunities and a few announcements would be made in the near future. GPI has itself always been an active dividend payer.
"We've paid back the initial investment and all our original shareholders are now in for nothing," said Adams. It has paid a total of 60cents/share in dividends in the last three financial years. GPI has kept its shareholders happy for most of its existence.
"You can list everybody's shares - but please - not mine," shareholder Max Raisenberg told management at a road show in Cape Town last week. "I'm not ready to trade them." Raisenberg is one of the founding shareholders.
The listing marks a new era for GPI's community shareholders and Adams personally.
After long court battles which threatened to derail the GPI listing and deprive the shareholders of further growth opportunities, management settled with major shareholder Cape Empowerment Trust in October last year - paving the way for listing.
"It's been a momentous journey for me GPI and myself personally," Adams told Fin24.com. The company has grown from the SunWest investment (which owns the GrandWest Casino & Hotel and Table Bay hotel) to almost all the major gaming and tourism asset in the country, mainly as a partner to Sun International.
The Real Africa investment allows GPI exposure to assets like the Carnival Casino in Gauteng and the Boardwalk Casino in Port Elizabeth as part of its now diverse gaming and tourism asset base.
Its 50% investment with Akhona Investments exposes GPI to the 22% Akhona holds in Afrisun KZN, which owns part of the Sibaya Casino in Durban.
- Fin24.com