By Nick Wilson
Unlisted empowerment investment company Grand Parade Investments said on Monday it had concluded a R231 million deal that would enable it to acquire a further 10% interest in SunWest from Sun International.
The deal would make Grand Parade, which focuses on investing in gaming and leisure stock, a large shareholder in SunWest and give it voting control in SunWest, which is its largest asset.
Grand Parade chairman Hassen Adams said this would set the stage for a listing because in terms of JSE listing requirements, a company has to be in control of its biggest asset in order to list.
Adams is also chairman of SunWest, which owns the GrandWest Casino and the Table Bay Hotel in Western Cape.
The deal will take place in three steps.
In its first step towards acquiring 10% of SunWest, Grand Parade would acquire 4% in SunWest from Sun International for R83,4 million. “That will bring our stake in SunWest up to 24%. Then we have another option to take up 2,46% of SunWest for R146,6 million,” said Adams.
GPI also had a third option to take up a further 5% stake for R165 per share. “This will make us a large shareholder in SunWest, which is the biggest asset of Sun International,” he said.
Adams said the deal was a result of “ongoing negotiation” with Sun International. It would see Grand Parade holding a 30% interest in SunWest.
Adams said that including the 30% interest in SunWest, GPI’s market capitalisation would be R2,5 billion.
Grand Parade has other assets, including a 38% interest in Golden Valley Casino in Worcester, and a 25% stake in GrandSlots, a limited payout machine gaming operation in Western Cape. The company also has 50% of Western Cape management company GrandWest.
“These are mainly Western Cape assets but we have already signed agreements on buying other assets throughout the country. We submitted bids in Bloemfontein and for a gaming stake in KwaZulu-Natal,” said Adams.
He said there had been strong demand for the company’s shares, with Grand Parade trading over the counter at R16 a share. The company planned to list on the JSE late next month or early December, subject to JSE approvals.
Business Day
Publisher: I-Net Bridge
Source: I-Net Bridge
