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Small Related Party Transaction concluded with HCI Monte Precinct Proprietary Limited
TSOGO SUN LIMITED
Incorporated in the Republic of South Africa
Registration number 1989/002108/06
Share code: TSG
JSE Alpha Code: TSGI
ISIN: ZAE000273116
("Tsogo Sun" or "the Company")
SMALL RELATED PARTY TRANSACTION CONCLUDED WITH HCI MONTE PRECINCT PROPRIETARY LIMITED
1. INTRODUCTION
Shareholders are advised that Company's wholly owned subsidiary, Tsogo Sun Casinos Proprietary
Limited ("TSC"), has concluded a sale of undivided share agreement ("Sale of Undivided Share
Agreement") with HCI Monte Precinct Proprietary Limited ("HCI Monte"), in terms of which TSC shall
purchase, and HCI Monte shall sell, a 25.355% (twenty five point three five five percent) undivided
share in the commercial office park development in Fourways which is operated as a rental enterprise,
and is commonly known as "Monte Circle", for an aggregate purchase consideration not exceeding
R167,000,000.00 (one hundred and sixty seven million Rand), payable in cash, upon the terms set out
hereunder ("Proposed Transaction").
2. RATIONALE FOR THE PROPOSED TRANSACTION
Monte Circle is the last remaining asset having a cross holding between the Company's holding
company, Hosken Consolidated Investments Limited ("HCI"), through HCI Monte, and the Company,
through TSC, with each of TSC and HCI Monte holding a 25.355% (twenty five point three five five
percent) undivided share.
It makes commercial sense for the Company to consolidate these interests in Monte Circle, which is
situated adjacent to its major casino investment precinct, Montecasino, into TSC, which owns other
parcels of land in and around the Montecasino precinct that are earmarked for future development.
3. PARTICULARS OF THE PROPOSED TRANSACTION
3.1. PARTIES
The parties to the Sale of Undivided Share Agreement are TSC and HCI Monte, a wholly owned
subsidiary of HCI. HCI is a material shareholder of the Company which, as at the date of this
announcement, directly and indirectly owns approximately 50% (fifty percent) of the total issued
shares in the Company.
3.2. SALIENT TERMS
3.2.1. TSC shall with effect from the Effective Date, as described in paragraph 3.4 below, acquire a
25.355% (twenty five point three five five percent) undivided share ("HCI Monte's Undivided
Share") in the commercial office park development in Fourways commonly known as "Monte
Circle" ("Monte Circle Development"), which Monte Circle Development is owned and operated
as a rental enterprise by a co-ownership established by the members of a consortium (which
includes TSC and HCI Monte) known as Consortium 64 and comprises, inter alia:
3.2.1.1. the immovable properties on which the Monte Circle Development is situated ("the
Immovable Properties");
3.2.1.2. all fixed and movable assets associated with the Immovable Properties and the Monte Circle
Development, all of which are co-owned by the Consortium 64 members (in their undivided
share percentages) and are used in connection with the management, control, maintenance
and/or functioning (and which are integral to the operation) of the Monte Circle
Development; and
3.2.1.3. the rights and title in and to all contracts concluded by Consortium 64 in respect of the Monte
Circle Development which are in force as at the Effective Date of the Proposed Transaction,
including all leases concluded with tenants of Consortium 64 in respect of the Monte Circle
Development.
3.2.2. The aggregate purchase price ("Purchase Price") payable by TSC for HCI Monte's Undivided Share
of the Monte Circle Development is equal to the sum of:
3.2.2.1. R163,000,000.00 (one hundred and sixty three million Rand); plus
3.2.2.2. the total funds actually advanced by HCI Monte to Consortium 64 prior to, and up until the
Effective Date, for the sole purpose of funding HCI Monte's proportionate share of
Consortium 64's costs of the development of the building currently under construction on the
Immovable Properties and described as "Building G", which funds as at the date of this
announcement are estimated to amount to approximately R2,450,172.00 (two million four
hundred and fifty thousand one hundred and seventy two Rand), and which shall in any event
be limited to an aggregate amount of R4,000,000.00 (four million Rand),
in each case, including VAT at the rate of 0% (zero percent).
3.2.3. The Purchase Price is payable in full on the Effective Date by way of electronic funds transfer into
the bank account of HCI Monte.
3.3. EFFECTIVE DATE AND TRANSFER OF HCI MONTE'S UNDIVIDED SHARE IN THE IMMOVABLE PROPERTIES
The Proposed Transaction has become unconditional with effect from the date of publication of this
announcement. All risk and benefit in and to HCI Monte's Undivided Share of the Monte Circle
Development shall transfer to TSC with effect from the Effective Date, being 31 October 2024, whilst
registration of transfer of the bare dominium of HCI Monte's Undivided Share in the Immovable
Properties shall be given to and taken by TSC, on and with effect from the date of registration of
transfer thereof into the name of TSC in the deeds office.
3.4. OTHER SIGNIFICANT TERMS OF THE PROPOSED TRANSACTION
The Sale of Undivided Share Agreement contains such warranties, undertakings and breach
provisions that are normal for a transaction of this nature.
4. FINANCIAL INFORMATION
4.1. The value of the net assets of HCI Monte as at 31 March 2024, being the date of the most recent
published financial results, amounted to R11,897,393.00 (eleven million eight hundred and ninety
seven thousand three hundred and ninety three Rand).
4.2. The profit after tax of HCI Monte for that period is R10,070,592.00 (ten million and seventy
thousand five hundred and ninety two Rand).
5. CATEGORISATION
5.1. By virtue of the fact that HCI is a material shareholder of (and controls) TSG, and HCI Monte is an
associate of HCI, the Proposed Transaction constitutes a "related party transaction" in terms of
section 10 of the JSE Listings Requirements.
5.2. As the Purchase Price payable by TSC constitutes less than 5% of the Company's market
capitalisation as at the date of conclusion of the Sale of Undivided Share Agreement, the Proposed
Transaction constitutes a "small related party transaction" in terms of section 10.7 of the JSE Listings
Requirements.
5.3. Small related party transactions are not subject to shareholder approval provided that the issuer has
informed the JSE in writing of the details of the transaction and has provided the JSE with written
confirmation by an independent professional expert acceptable to the JSE that the terms of the
proposed transaction with the related party are fair as far as the shareholders of the issuer are
concerned.
6. FAIRNESS OPINION
6.1. The Company appointed Valeo Capital Proprietary Limited ("Valeo"), an independent professional
expert acceptable to the JSE, to provide its directors with an independent professional expert's
opinion regarding the fairness of the Proposed Transaction as required in terms of the JSE Listings
Requirements.
6.2. Written confirmation has been received from Valeo that the terms of the Proposed Transaction are
fair as far as the shareholders of the Company are concerned ("Fairness Opinion"). The Fairness
Opinion will lie for inspection to shareholders of the Company at the Company's registered office
(Palazzo Towers East, Montecasino Boulevard, Fourways, 2055) for a period of 28 (twenty eight)
days from the date of this announcement.
6.3. The terms of the Proposed Transaction and Fairness Opinion have been considered and approved by
the non-conflicted directors of the Company.
Fourways
15 October 2024
Equity Sponsor:
Investec Bank Limited
Debt Sponsor:
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Legal Advisor:
White and Case
Date: 15-10-2024 05:50:00
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