Related Articles
Top Stories
May 25 2012 13:58
The costs of the first phase of the Gauteng Freeway Improvement Project have increased significantly to almost R90bn, according to a report.
May 24 2012 17:31
The Reserve Bank will maintain current interest rates, and a considerable reduction in the local petrol price is anticipated, says governor Gill Marcus.
May 25 2012 11:36
The JSE has identified and stopped "incorrect" trades from one of its members, and will reverse the trades and lower the session's total value after the close.
Johannesburg - Investment holding company Cape Empowerment Trust (CET) has reached an agreement to buy 12m Grand Parade Investments (GPI) shares for R51m in cash.
The transaction follows a landmark agreement between the two companies to withdraw all litigation against the gaming and leisure company earlier this month. This now means GPI would proceed with the implementation of the issue of new shares to its GPI BBBEE Trust, as well as seek a listing on the JSE.
The parties had been involved in a three-year legal battle, with CET (and entities controlled by CET) challenging the implementation of the BBBEE Trust and the issuing of 12,6m shares to it. It had also threatened to block any listing plans.
Soon after the agreement was reached, CET voted in favour of the listing resolution and all other resolutions preparing the company for a listing on the JSE in December. "CET (now) supports this (listing) strategy," it said in the statement on Thursday.
As part of its listing plans, GPI has sub-divided its shares in one-to-four split. The agreement to buy the 12m (post-split) shares at 425cents/share values the GPI at R1, 5bn.
This will take CET's ownership in GPI to about 22%, realising its objective of having effective control over 20%.
CET will now be in a position to equity account GPI?s revenue and thereby boost its cash flow. It will nominate a director to the GPI board, as speculated in Finweek ( "Minds have met"- 22 November) and in this publication (GPI: The mother of all AGMs). In addition to this, CET said its "remaining corporate governance concerns have been adequately addressed".
CET intends to fund the purchase through a combination of internal resources and external funding, it said. The transaction is expected to be implemented before the end of November.
The deal also serves to help GPI meet its 35% BEE lock-in for four years as that was a major condition of the deal it recently concluded with Sun International when buying an additional 10% and voting control of SunWest International. SunWest owns the GrandWest casino and Table Bay hotel in Cape Town, which is GPI's major asset.
The Sun International transaction was key to GPI meeting the JSE's listing requirements and GPI?s management have indicated a willingness to list GPI before the end of December.
CET shares closed 3,14% down at 247cents/share on Thursday.
- Fin24