Julius Baumann

Aviation and Tourism Editor

TWO of Gold Reef Resorts’ empowerment shareholders have been forced to sell their 15,01% holding in the casino group after facing foreclosure.

Gold Reef directors Bongani Biyela and Richard Moloko sold their 41-million shares to Mainstreet 581, an indirect wholly owned subsdiary of Tsogo Sun last week. Mainstreet 581 already holds a 4,86% stake, with the acquisition taking the company’s stake to 19,87%.

The two directors, who quit the board last week, bought the 15,01% stake in Gold Reef last June for R20,50 a share. The transaction was funded by an unknown entity. The two face foreclosure after failing to meet their commitments.

However, Biyela and Moloko did not do too badly. Mainstreet 581 paid R940,5m, or R22,50 a share, for the stake, above the R20,50 the directors paid a year ago and at a massive premium to yesterday’s closing price of R14,80.

“It is regrettable that these two gentleman were forced to sell their stakes as they had a huge impact on the business,” Steven Joffe of Gold Reef Resorts said yesterday.

Gold Reef said the shares sold constituted the 25,1% of the issued share capital of Gold Reef subject to the voting pool agreement entered into to ensure the empowerment base was at least 25,1%.

The transaction now required approval by provincial gambling boards, as Mainstreet 581 now holds more than the prescribed 5%. The gambling boards had to determine if Gold Reef still met gambling board licence conditions and trade and industry department empowerment codes.

Source: Business Day