Grand Parade Investments on Thursday confirmed that all of the outstanding conditions to the sale and purchase agreement concluded with the Australian-based Tatts Group have now been fulfilled and it has gained full control of the Carentan Group. All of the necessary regulatory approvals have been obtained.

The Carentan Group is comprised of 1 000 limited payout slot machines (LPM) allocated to Thuo Gaming Western Cape (Thuo WC) trading under the Grandslots brand, and 1 000 machines allocated to Thuo Gaming KZN (Thuo KZN) trading under the Kingdomslots brand.

Both of these route operators are market leaders in the LPM industry.

In addition, the Carentan Group also includes a machine manufacture and distribution business, which supplies machines to these operations.

GPI has also satisfied the remaining conditions precedent to the separately announced agreement in terms of which it will secure the other minority interests in Thuo Gaming South Africa (TGSA), Thuo WC and Worcester Casino (WC), by acquiring 100% of BVI 967, which owned 10% of TGSA, 100% of Slot Solutions, which owned 4.9% Thuo WC, and 100% of Stripe Investments 7, which owned 7.72% of WC.

GPI therefore now owns and controls 100% of the Carentan Group, 100% of TGSA, 100% of Thuo WC and an effective 92.5% of Thuo KZN, through its 75% economic interest in Akhona GPI, which in turn owns 30% of Thuo KZN, with TGSA owning the other 70%.

GPI Chairman Hassen Adams said that the deal would further boost GPI's gaming footprint in the Western Cape and KwaZulu-Natal and, eventually, further afield.

"This deal is a major step forward in empowerment within the gaming industry in South Africa and, specifically, will accelerate our growth trajectory with increased control over some of our strategic gaming assets.

"GPI is one of the few genuine BEE companies in the industry. This is a critical milestone on the road to achieving our vision of becoming a respected and major force in the African gaming, leisure and tourism sector," said Adams.

He added that this opportunity represents a natural progression towards the group's long held ambition of being a black empowerment company with more direct control of its destiny, especially now that it is able to manage and operate its own business.

"It is particularly significant for our shareholders given that the LPM industry, while being operationally more complex, is much less capital intensive than the 'bricks and mortar' urban casino industry. We therefore feel that this sector is more suited to our African expansion strategy."

Adrian Funkey, CEO of GPI added, "With our combined management teams we are confident that we can drive this new operating component of our business very successfully.

This transaction gives us access to the machine procurement and centralised operations of the Thuo business, which in turn enhances our ability to become a more integrated and efficient operation as a whole."

Funkey emphasised that Grandslots is already a cash generative business with a strong distribution network across the Western Cape consisting of 193 different venues with 918 machines that have been rolled out so far.

"GPI is confident that Kingdomslots, which currently comprises of 155 different venues with 752 machines, will follow suit as the full quota of machines is rolled out. The two businesses have developed strong market positions that will be further improved through synergies within the GPI group.

"Additionally, the historical earnings of the Thuo Gaming group have been impacted by the costs associated with unsuccessful LPM licence applications, which obviously are non-recurring."

"We understand Thuo's business model very well, having been intimately involved in the development of the business since its inception, and, as such, believe we have acquired a well run business that offers us, and our shareholders, a secure low risk investment that is already being managed well, and is favourably positioned for significant growth," he added.

"As GPI consolidates its influence over its portfolio of assets, we will be looking to drive further gains in South Africa's gaming and leisure sector and, in turn, increase transformation and our support for local communities.

"With our track record of transformation and governance and our focus on providing returns to our stakeholders, it should be clear that our commitment to the triple bottom line is genuine and not something we do because we have to, but rather because we want to," added Adams

"The fact that the South African gambling dispensation is so well regulated gives us the confidence to make this major investment," added Funkey.

GPI has also successfully partnered with Worldsport and VWV to form Grand World Vision Events, which won the tender to manage the successful Cape Town Fifa Fan Fest on the Grand Parade.

"This is a very exciting partnership that we believe will yield good opportunities for us in the future," said Adams.

Source: I-Net Bridge