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A two-thirds majority of Grand Parade Investments [JSE: GPL] shareholders on Thursday evening voted in favour of a bid by Sun International to buy its remaining 30% stake in Sun Slots.
The vote took place at the investment holding company's annual general meeting held at the GrandWest Casino in Cape Town.
Grand Parade Investments (GPI) announced the prospective sale of the Sun Slots stake for R504m in August. Sun Slots operates pay-out machine gaming licences in provinces across South Africa. The proceeds of the sale will be used to pay down debt held against the shares, and to pay a special dividend.
According to a statement by GPI, now that shareholders have voted for the Sun Slots deal, GPI will move to restructure its balance sheet by reducing debt.
This will allow the company to revert to being "dividend active", it said.
GPI's non-executive chair Hassen Adams also addressed his future at the company, in his chairman's report. In May this year the group had announced Adams' would retire as executive chair and would become non-executive chair at the end of June, after many years at the operational helm of GPI.
Fin24 previously reported that Adams received a severance pay of R5.95m for moving to a non-executive position.
"I will continue as the non-executive chair and will use my best endeavours to give strategic direction and policy implementation and ensure good corporate governance. It is important to me to transfer my years of experience and wisdom to the new and young in-coming executive, to create a seamless handover," Adams said.
Adams said at the meeting that the company would be "returning to its roots as an investment company".
"This allows us to enter the phase where GPI migrates towards a pure investment company. GPI's future is bright. Our focus on returning to being an investment company will re-rate our share price closer to our intrinsic net asset value," he said.
"We continue to invest in people to ensure a well-developed staff complement that embraces 21st century applications, and with skills appropriate to execute our strategy. We are motivated, and fit for purpose."
GPI was founded in 1997 from humble beginnings, Adams said.
"Our founding shareholders - in excess of 20 000 individual shareholders - predominantly from the disenfranchised communities, invested seed capital of R28m. Today, we are a multi-billion rand company that has since inception not required funding from its shareholders," he said.
"During the 22 years of our existence we have navigated GPI through hostile take-over attempts and challenges from fund manager activism. GPI has created exceptional value for its founding shareholders through its continuous growth and leveraging of our acquired businesses. These businesses were developed to maturity and on-sold at substantial yield."
He admitted that, whilst the execution of its Dunkin Donuts and Baskin Robbins investments "may have been unsuccessful", it has not substantially impeded the net asset value of the business. The stores were closed earlier this year.
Its Burger King investment, on the other hand, "is rising like a phoenix against all the negativity and impatience of the market", in his view. Adams expects Burger King to also become a profitable leverage opportunity in the near future.
"It has always been an ambition to ensure that GPI exercises a dividend active policy and continue to do so, to the best of our ability. It would be remiss of me not to thank my executive team and employees who have held the flag up high whilst I was incapacitated through illness," Adams said.
"Since my return from my bout of illness, we have embarked on a process of unshackling ourselves from the negative debate in the market place. We have stayed focused on degearing the business and to return GPI to be cash positive. We have also ensured growth and allowed the company to continue to be dividend active."
Adams successfully negotiated the sale of a 10% stake in the Spur Corporation and the remaining 30% stake in Sun Slots.
"We are continuing to negotiate the partial sale of Burger King and it is our intention to retain a non-operational minority interest in the business. This allows us to enter the phase where GPI migrates towards a pure investment company," Adams said.
* Compiled by Carin Smith
