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Unbundling of Spur Shareholding and Finalisation of Completion Accounts for Burger King Disposal
GRAND PARADE INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1997/003548/06)
Share code: GPL
ISIN: ZAE000119814
(“GPI” or “the Company”)
GPI COMPLETES EXIT FROM RESTAURANT BUSINESSES:
UNBUNDLING OF SPUR SHAREHOLDING AND FINALISATION OF COMPLETION
ACCOUNTS FOR BURGER KING DISPOSAL
Unless defined in the body of this Announcement, capitalised terms shall have the meanings
ascribed to them in the definitions section at the end of this Announcement.
UNBUNDLING OF SPUR SHAREHOLDING
1. INTRODUCTION
1.1. Shareholders are hereby advised that the Board has resolved to unbundle the
Company's shareholding of 8 447 731 Spur Shares, comprising approximately 9,28%
of the total issued share capital of Spur, to Shareholders by way of a pro rata
distribution in specie, in the ratio of 1 Spur Share for every 63 GPI Shares held on
the Unbundling Record Date (“Distribution Ratio”), subject to the fulfilment of the
Condition Precedent. Based on the current share price of Spur of R20.65, the value
of the 8 447 731 Spur shares, being distributed to GPI Shareholders, is approximately
R174 million which is equivalent to 37c per GPI share.
1.2. The Unbundling, if implemented, will constitute a pro rata distribution in specie in
terms of section 46 of the Companies Act, with Shareholders thereafter having a
direct interest in Spur rather than an indirect interest via GPI.
1.3. As Spur is listed on the JSE and will remain listed on the JSE on the implementation
of the Unbundling, the Unbundling will not require the approval of Shareholders in
terms of paragraph 5.85 of the JSE Listings Requirements.
2. RATIONALE FOR UNBUNDLING
The unbundling of the Spur Shares is aligned with GPI’s strategy to unlock value by
reducing the discount at which GPI shares trade, relative to the intrinsic net asset value
of GPI’s underlying assets. Currently GPI shares trade at a discount in excess of 20%.
The unbundling of the Spur Shares will give GPI’s shareholders the opportunity to hold
a direct interest in Spur rather than through GPI. On completion of the Unbundling, the
Spur Shares held directly by Shareholders will be valued at the market value thereof as
opposed to a discount to market if held through GPI.
3. FURTHER INFORMATION REGARDING THE UNBUNDLING
3.1. Condition Precedent
The Unbundling is subject to the condition that the required exchange control
approval be obtained from the South African Reserve Bank on terms and conditions
acceptable to GPI.
3.2. Implementation of the Unbundling
3.2.1. Under the Unbundling, Shareholders will receive the Spur Distribution Shares in
Dematerialised form only.
3.2.2. Accordingly, all Certificated Shareholders wishing to receive their Spur Distribution
Shares in Dematerialised form must appoint a CSDP under the terms of the
Financial Markets Act, directly or through a Broker, to receive the Spur Distribution
Shares on their behalf.
3.2.3. Should a Certificated Shareholder not appoint a CSDP under the terms of the
Financial Markets Act, directly or through a Broker, to receive the Spur Distribution
Shares on its behalf, such Shareholder will be issued with a statement of
allocation, reflecting its Spur Distribution Shares, by the Transfer Secretaries.
Such Shareholders can thereafter instruct the Transfer Secretaries to transfer their
Spur Distribution Shares, represented by the statement of allocation, to their
appointed CSDP or can instruct the Transfer Secretaries to issue them with a
share certificate at any time following the Unbundling.
3.2.4. If a Shareholder is in any doubt as to what action to take in respect of the
Unbundling, such Shareholder should consult its Broker, CSDP, banker, attorney
or other professional advisor. Alternatively, if a Shareholder is in any doubt, such
Shareholder may contact the Company for assistance by emailing the following
email address: investor-relations@grandparade.co.za or calling 021 412 1408.
3.3. Fractional Entitlements
3.3.1. Where a Shareholder’s entitlement to the Spur Distribution Shares in terms of the
Unbundling, calculated in accordance with the Distribution Ratio, gives rise to a
fraction of a Spur Distribution Share, such fraction will be rounded down to the
nearest whole number, resulting in allocations of whole Spur Distribution Shares
and a cash payment in respect of the fraction to such Shareholder. The fractional
entitlements will be delivered in aggregate to each CSDP, and they will be
responsible for the payment of the cash fractional payment to Shareholders, which
will be funded from the disposal of the fractional entitlements to which they are
entitled on the market.
3.3.2. In accordance with the JSE Listings Requirements, the weighted average traded
price for a Spur Distribution Share on the last day to trade, currently anticipated to
be Tuesday, 7 June 2022, plus one business day less 10% will be used to calculate
the cash value of the respective fractions of Spur Distribution Shares to be paid to
the applicable Shareholders. The cash value in respect of the fractions of Spur
Distributions Shares will be announced on SENS on the day immediately
preceding the Unbundling Record Date, which is currently anticipated to occur on
Friday, 10 June 2022.
3.3.3. Certificated Shareholders whose bank account details are not held by the Transfer
Secretaries, are requested to provide such details to the Transfer Secretaries to
enable payment of the cash amount due for the aforementioned fraction of a Spur
Distribution Share. Should no details be on record, the funds will be held by the
Company in trust until such time as the details have been provided and the cash
fraction will thereafter be paid to the Shareholder upon its request without interest,
subject to the applicable laws of prescription.
3.4. Exchange Control
3.4.1. GPI will apply for the requisite exchange control approval from the Financial
Surveillance Department of the South African Reserve Bank for the Unbundling.
3.4.2. If Shareholders are in any doubt as to what action to take, they should consult their
professional advisors.
3.4.3. Shareholders who are not resident in, or whose registered addresses are outside
the Common Monetary Area, will need to comply with the Exchange Control
Regulations with further details to be included in the finalisation announcement.
3.5. Foreign Shareholders
3.5.1. No action has been taken by GPI to obtain any approval, authorisation or
exemption to permit the distribution of the Spur Distribution Shares or the
possession or distribution of this Announcement (or any other publicity material
relating to the Spur Distribution Shares) in any jurisdictions other than South
Africa.
3.5.2. The Unbundling is being conducted under the procedural requirements and
disclosure standards of South Africa which may be different from those applicable
in other jurisdictions. The legal implications of the Unbundling on persons resident
or located in jurisdictions outside of South Africa may be affected by the laws of
the relevant jurisdiction. Such persons should consult their professional advisors
and inform themselves about any applicable legal requirements, which they are
obligated to observe. It is the responsibility of any such persons wishing to
participate in the Unbundling to satisfy themselves as to the full observance of the
laws of the relevant jurisdiction in connection therewith.
3.6. Further information
3.6.1. There are 470,022,741 GPI Shares in issue at the date of this Announcement. The
Company’s income tax number is 9037038024.
3.6.2. The Unbundling will not enjoy the benefit of any roll over relief and no
apportionment of base cost will apply as it will not meet the requirements as set
out in section 46 of the Income Tax Act, 1962. In this particular case, the
Unbundling will be funded from income reserves and not from contributed tax
capital. The base cost of GPI Shares will thus not be reduced and the distribution
of the Spur Distribution Shares will constitute a dividend subject to dividend
withholding tax, to the extent applicable. The further details will be set out in the
finalisation announcement.
4. SALIENT DATES AND TIMES
4.1. The salient dates for the Unbundling are as follows:
2022
Assuming the Condition Precedent is fulfilled:
Declaration Date Tuesday, 10 May
Finalisation announcement in respect of the Unbundling Monday, 30 May
expected to be published on SENS by 11:00 a.m. on
Last day to trade GPI Shares in order to be recorded in the Tuesday, 7 June
Register to participate in the Unbundling expected to be on
Trading ex entitlement to participate in the Unbundling Wednesday, 8 June
expected to commence on
Announcement in respect of the cash value of fractional Thursday, 9 June
entitlements applicable to the Unbundling expected to occur by
11:00 a.m. on
Unbundling Record Date expected to be on Friday, 10 June
Announcement of closing share price to occur after market Friday, 10 June
close on the Unbundling Record Date expected to be
Payment Date (CSDP or Broker accounts updated to reflect Monday, 13 June
the Spur Distribution Shares, alternatively, statements of
allocation issued in respect of applicable Spur Distribution
Shares)
Notes:
(i) If the finalisation date has not occurred by Monday, 30 May 2022, an updated
timetable will be published on SENS.
(ii) Share certificates may not be Dematerialised or rematerialised between Wednesday,
8 June 2022 and Friday, 10 June 2022, both dates inclusive.
FINALISATION OF COMPLETION ACCOUNTS FOR BURGER KING DISPOSAL
5. UPDATE ON STATUS
5.1. Shareholders are referred to the Company’s various announcements regarding the
transaction in which the Company’s wholly-owned subsidiaries, Grand Foods
Investments 1 Proprietary Limited and Grand Foods Proprietary Limited, sold all of
the shares they held in Burger King South Africa (RF) Proprietary Limited and Grand
Foods Meat Plant Proprietary Limited, respectively, to an affiliate of ECP Africa Fund
IV LLC and ECP Africa Fund IV A LLC (“Disposal”) and in particular to the Circular
to shareholders distributed on the 12 March 2021 (“Circular”).
5.2. Save where the context indicates otherwise, capitalised terms used but not defined
in this announcement, shall bear the meanings ascribed to them in the Circular.
5.3. In terms of 2.6.3 of the Circular, no later than 90 Business Days after the Closing
Date, the Buyer were to prepare and deliver to the Sellers for review drafts of: (a) in
respect of the BKSA Seller, the BKSA Completion Accounts and the BKSA
Consideration Statement (together the “BKSA Documents”); and (b) in respect of
the GFMP Seller, the GFMP Completion Accounts and the GFMP Consideration
Statement (together the “GFMP Documents”).
5.4. In accordance with the aforesaid process, the BKSA Documents and GFMP
Documents have been finalised and the BKSA and GFMP Considerations have been
agreed as being R 493,968,879 and R 20,226,445, respectively. The agreed amounts
represent a reduction on the Purchase Price Estimates as at the Closing Date by
R1,727,040 and R1,197,138, respectively.
5.5. In addition, the parties have agreed that the Sellers shall pay the Buyer an aggregate
amount of R 21,021,781 in respect of remodeling costs for stores older than 7 years
as at the Closing Date. This payment will be set-off in 2 equal amounts against the
BKSA Tranche 2 and Tranche 3 payments.
5.6. The BKSA Tranche 2 payment is R12,633,218 and is scheduled to be paid on
10 May 2022 while the BKSA Tranche 3 payment is R14,187,553 and is scheduled
to be paid on 3 November 2023.
Cape Town
10 May 2022
Sponsor
PSG Capital
Advisor
Rand Merchant Bank
DEFINITIONS
In this Announcement, unless the context indicates the contrary, the following expressions
have the meanings given to them below:
“Announcement” means this announcement published on SENS by GPI;
“Board” means the board of directors of GPI from time to time;
“Broker” means any person registered as a “broking member (equities)” in accordance with
the provisions of the Financial Markets Act;
“Certificated Shareholder” means a Shareholder who holds Certificated Shares;
“Certificated Shares” means Shares which are not Dematerialised, title to which is represented
by a share certificate or other Document of Title;
“Common Monetary Area” means South Africa, the Republic of Namibia and the Kingdoms of
Eswatini and Lesotho;
“Companies Act” means the Companies Act, 2008 (Act No. 71 of 2008), as amended from
time to time;
“Condition Precedent” means the condition precedent to the Unbundling, as set out in
paragraph 3.1 of this Announcement;
“CSDP” means a central securities depository participant registered in terms of the Financial
Markets Act with whom a beneficial holder of shares holds a Dematerialised share account;
“Dematerialised” means the process by which securities held in certificated form are converted
to or held in electronic form as uncertificated securities and recorded as such in a sub-register
of security holders maintained by a CSDP and “Dematerialised” shall bear a corresponding
meaning;
“Distribution Ratio” means the ratio of 1 Spur Distribution Shares for every 63 GPI Share held
on the Unbundling Record Date, to be distributed to Shareholders in terms of the Unbundling,
should the Condition Precedent be fulfilled, and the Unbundling be implemented;
“Documents of Title” means share certificates, certified transfer deeds, balance receipts or
any other documents of title to Certificated Shares acceptable to GPI;
“Exchange Control Regulations” means the South African Exchange Control Regulations,
promulgated in terms of the South African Currency and Exchanges Act, 1933 (Act No. 9 of
1933), as amended from time to time;
“Financial Markets Act” means the Financial Markets Act, 2012 (Act No. 19 of 2012), as
amended from time to time;
“Foreign Shareholders” means Shareholders that are registered in a jurisdiction outside of
South Africa, or who are resident, domiciled or located in, or who are a citizen of, a jurisdiction
other than South Africa;
“GPI Shares” means no par value ordinary shares in the Company’s share capital;
“JSE” means JSE Limited (registration number 2005/022939/06), a public company
incorporated under the laws of South Africa and which is licensed as an exchange in terms of
the Financial Markets Act;
“JSE Listings Requirements” means the Listings Requirements of the JSE;
“SENS” means the Stock Exchange News Service of the JSE;
“Shareholders” means registered holders of GPI Shares;
“Spur” means Spur Corporation Limited (registration number 1998/000828/06), a public
company duly incorporated in accordance with the laws of South Africa, the ordinary shares
of which are listed on the JSE;
“Spur Distribution Shares” means 8 447 731 Spur Shares, comprising approximately 9,28%
of the total issued share capital of Spur, which will be distributed by GPI to Shareholders in
terms of the Unbundling, should the Condition Precedent be fulfilled, and the Unbundling be
implemented;
“Spur Shares” means no par value ordinary shares in the issued share capital of Spur;
"South Africa” means the Republic of South Africa;
“Transfer Secretaries” means Computershare Investor Services Proprietary Limited
(registration number 2004/003647/07), a private company incorporated under the laws of
South Africa;
“Unbundling” means the planned distribution in specie by GPI of the Spur Distribution Shares
to the Shareholders in the Distribution Ratio and pro rata to their respective shareholdings in
GPI; and
“Unbundling Record Date” means the date on which a Shareholder must be registered in the
securities register of GPI in order to be eligible to participate in the Unbundling.
Date: 10-05-2022 10:15:00
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