Glitch in the sale of Burger King

Business

Johannesburg – Grand Parade Investment (GPI) informed its shareholders that the date for the conclusion of the share purchase agreements (SPA) for the disposal of Burger King South Africa (BKSA) and Grand Foods Meat Plant (GFMP) has expired.

This follows the investment holding company entering into the sale of the two businesses in February to Emerging Capital Partners (ECP) Africa Fund IV LLC for R670 million for Burger King and R27 million for Grand Foods Meat Plant was R27m.

However, the value for the sale of the businesses was revised down in September to R570m for BKSA and R23m for GPMP after the Covid-19 outbreak hurt the group’s earnings for the year to end June.

GPI was forced to reconsider its asking price following the pandemic as its earnings declined by more than 250% for the year to end June.

“Shareholders are advised that the date for the conclusion of the share purchase agreement in respect of the disposal has expired. The parties are however considering a formal extension of the offer while urgently negotiating the SPA. Shareholders will be updated as to the progress of such negotiations in due course,” said the group.

The sale of BKSA, which has more than 90% restaurants in the country, and GFMP comes after GPI closed Dunkin Donuts and Baskin Robbins in South Africa due to poor performance in 2019 as well as selling its 10% stake in Spur Corporation for R260m.

GPI share price was flat at R2.34 a share on the JSE on Thursday afternoon, with a capitalisation of R1.1 billion.

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