Grand Parade gets smaller burger deal due to Covid-19

print

Grand Parade gets smaller burger deal due to Covid-19

Published Date: 2020-07-30 | Source: Stephen Gunnion | Author: Stephen Gunnion

Grand Parade gets smaller burger deal due to Covid-19

The sale to ECP Africa Fund was renegotiated due to the risk introduced by Covid-19 and the sales impact of the lockdown.

Grand Parade Investments will receive more than R100 million less for its stake in Burger King and its Grand Foods Meat Plant due to the impact of Covid-19 on its business.

The investment group said the deal with private equity group Emerging Capital Partners (ECP) Africa Fund for its 95.36% stake in the local burger franchise was renegotiated due to disruptions caused by the lockdown. It will now get R570 million for Burger King, down from the R670 million announced in February, and R23 million for Grand Foods Meat, from R27 million previously.

The disposal is part of the black-owned investment group's strategy to unlock value for shareholders through a controlled sale of underlying assets. It brought the franchise of US burger restaurants to South Africa in 2013 after signing a master franchise agreement with the US group. It is estimated to have spent close to R1 billion on the business.

Last month, Grand Parade sold its head office 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.

Its shares rose 1.3% to R2.30 in light trade yesterday.





Similar Stories