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Grand Parade sells its stake in Sun Slots for more than R500 million

Aug 30 2019 18:25
Compiled by Carin Smith

Grand Parade Investments (GPI) on Friday announced a deal to sell its 30% stake in Sun Slots back to Sun International for R504 million. 

Sun Slots operates pay-out machine gaming licences in provinces across South Africa.

GPI bought 100% of Sun Slots in June 2010, but over the years reduced its stake. Since 2017, it has held 30% - with Sun International holding the rest. In an unsolicited bid earlier this year, Sun International offered to purchase the remaining 30% held by GPI in Sun Slots.

GPI, which owns Grand West casino in Cape Town as well as the Burger King franchise in the country, has been under pressure in recent years, with its share price losing 60% of its value in the past five years.

Its attempts to launch the US fast-food chains Dunkin Donuts and Baskin Robbins failed, and it was forced to close these outlets in recent months. Unhappy with its financial performance, the group's institutional investors tried to oust the company's chairperson Hassen Adams. He finally resigned as executive chairperson in May this year after selling R60 million in shares. Adams remains on the board.

GPI said in a statement on Friday that the new deal will yield significant value for shareholders. It will use the money to pay off debts, and may also return some of it to shareholders as dividends.

GPI CEO Mohsin Tajbhai says the sale allows the company to restructure its balance sheet, which is beneficial, particularly in the current challenging economic conditions.

"The sale will also free up cash which can be passed back to shareholders. We are currently in a closed period but will offer further comment when our results are issued on September 20,” said Tajbhai.

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