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 - The long-promised listing of broad-based black economic empowerment company Grand Parade Investments (GPI) on the JSE is still in limbo.
This time it is a combination of factors that have frustrated the listing - the JSE's listing requirements and the volatile market conditions.
Fin24 has established that GPI is having a difficult time trying to convince the JSE that it does meet the bourse's listing requirements. "We are still sorting out a few technical issues with the JSE," says GPI chairperson Hassen Adams.
Adams wouldn't go into detail except to say those are "some of the issues you raised in your last report in January". He says GPI is still discussing the matter with its legal representatives and the JSE with a view to getting the JSE's full approval.
The major qualifying condition for a listing on the JSE is that a company must have control of its major asset. In the case of GPI that asset is SunWest International, which owns the GrandWest casino and Table Bay Hotel in Cape Town. GPI owns 30% of SunWest while Sun International owns the controlling stake of 63% and Afrisun and a SunWest BEE staff trust own the rest.
To overcome the ownership hurdle, GPI bought 50%-plus one share voting control of SunWest late last year. But a shareholders' agreement which forms part of voting control transaction has only served to frustrate the listing.
According to the agreement, any major decisions regarding SunWest must be passed with a 60% vote. That effectively gives Sun International veto powers over SunWest and therefore nullifies GPI's voting control over the asset.
Confident of listing
But Adams remains confident that GPI will list sooner rather than later. Says Adams: "We are taking legal advice and we're confident we're going to get there. We'll be patient and abide by the rules." Adams wouldn't give a timeframe for the listing.
It therefore seems that Cape Empowerment Trust (CET) will remain the easiest way to get into GPI for the foreseeable future, for at least while GPI and the JSE cannot reach an agreement. CET is GPI's single largest shareholder with close on 20% of the shares.
To facilitate a smooth and quick listing of GPI, perhaps the management team could twist Sun International's arm and persuade it to allow a reverse-listing of GPI into its 63% subsidiary, Real Africa Holdings.
It should be noted that both Real Africa and GPI are Sun International's empowerment partners (GPI in the Western Cape) and all their fortunes are inextricably linked.
Should that happen, duplication and costs would be reduced as the number of entry points into the best gaming assets in the country would fall to just two - Sun International and Real Africa - while also returning the latter's control to black hands.
But Adams also points at the current market conditions as another delaying factor.
"The current market conditions are also not conducive to a listing," says Adams. "There hasn't been a single listing on the JSE for quite a few weeks now and we wouldn't go into the volatility of the JSE at this stage."
The negative sentiment in the market has resulted in the all-share Index falling by more than 15% at the beginning of the year.
- Fin24