Grand Parade flips its head office


Grand Parade flips its head office

Published Date: 2020-06-30 | Source: Stephen Gunnion | Author: Stephen Gunnion

Grand Parade flips its head office

The investment company says it will use the proceeds to reduce debt secured by the property and will consider distributions to shareholders.

Grand Parade Investments has finally sold its head office as it reduces costs and disposes of assets to unlock value for shareholders.

The black investment company said subsidiary GPI Properties sold the building at 33 Heerengracht Street in the Cape Town CBD to Aragon Property Development for R90 million. It said the building was currently under-utilised and the sale would unlock capital that could be used to repay debt and/or be returned to shareholders through distributions. It will receive R80 million on the date of transfer, with the balance coming a year later. An earlier deal to sell the property fell through.

Grand Parade has shifted strategy following its foray into the fast-food sector with the acquisition of the local Burger King franchise, followed by the local rights to Dunkin' Donuts and Baskin-Robbins. It liquidated the loss-making Dunkin' Donuts and Baskin-Robbins franchises at the end of 2018 due to the massive investment that would have been required to make the chains profitable. In February it reached a R697 million deal to sell Burger King SA and its Grand Foods Meat business to private equity group Emerging Capital Partners (ECP) Africa Fund.

Following the latest disposals, Grand Parade will be left with a number of minority gaming and leisure assets, including SunWest's GrandWest Casino and The Golden Valley Casino and Lodge (Worcester Casino). Last year, it agreed to sell its Sun Slots stake to Sun International and sold part of its stake in Spur Corporation back to the restaurant group.

The change in strategy came after turnaround specialist Value Capital Partners (VCP) increased its shareholding in Grand Parade to just over 20% in April last year after buying shares from The Nadeson Trust. Former chairman Hassan Adams is the major beneficiary of the trust.

Its shares closed 4.4% higher at R2.40 yesterday.

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