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”)



CATEGORY 2 TRANSACTION ANNOUNCEMENT


1.     INTRODUCTION

       Shareholders are advised that the Company has concluded a number of agreements,
       relating to the acquisition and disposal of certain rental enterprises, in relation to the
       settlement of a dispute with Gumboot Investments Proprietary Limited. The particulars of
       the transaction, description of key terms, purchase consideration and other related
       matters are detailed in this announcement. For the avoidance of doubt, there are no
       related parties of the Company involved in the transactions described below.

2.     RATIONALE FOR THE CONCLUSION OF THE TRANSACTIONS

2.1.      In June 2016 Mac Brothers Catering Equipment Proprietary Ltd (“Mac Brothers”) (a
          subsidiary, at the time, of GPI) and the Company entered into a sale and lease back
          agreement with Gumboot Investments Proprietary Limited (“Gumboot”) to sell two
          properties owned and occupied by Mac Brothers, being Erf 32496 Cape Town, in the
          City of Cape Town, Cape Division, Western Cape Province, situated at 32 – 34
          Benbow Avenue, Epping Industria 1, measuring 13 048 m2 (“Epping Property”) and
          Erf 86 in the Ekurhuleni Metropolitan Municipality, Gauteng Province situated at 138
          Terrance Road, Sebenza, Edenvale, Gauteng, measuring 5 565m2 (“Sebenza
          Property”) (collectively, the “Properties”). One of the suspensive conditions of the
          aforesaid transaction between Mac Brothers and Gumboot was that Mac Brothers
          enters into a triple net, self-repairing agreement of lease in respect of the Epping
          Property with an initial base rental of R552 018 per month (excluding operational
          costs), an escalation of 7% per annum and a rental term of 10 years.

2.2.      The lease agreement was entered into by Mac Brothers with a parent company
          guarantee and indemnity provided by GPI on 20 June 2016. In addition, an undertaking
          to replace the asbestos roof of the Epping Property was provided by Mac Brothers. As
          at the end of June 2022 the net present value of the outstanding rental was
          approximately R41m and the total cost to replace the roof was approximately R5m.
          The total exposure under the guarantee/indemnity as at the end of June 2022 was
          estimated at approximately R46m.

2.3.      In April 2022 Mac Brothers was placed under voluntary liquidation and the lease
          agreement between Mac Brothers and Gumboot was cancelled in June 2022 by the
          appointed liquidator. This opened GPI to a potential damages claim under the
          indemnity provided by GPI. The extent of the damages would however have to be
          established by a court unless agreed between GPI and Gumboot.

2.4.      In order to limit the exposure and prevent a lengthy litigious process, GPI agreed to
          purchase the rental enterprises conducted at the Properties from Gumboot, on the
          terms and conditions set out more fully below, for an aggregate amount of
          approximately R66.5m, which was calculated as the market value of the buildings plus
         a premium which included the net present value of the portion of the rental that was
         higher than a market related rental.

2.5.     The reason for the premium is that the rentals guaranteed by GPI are higher than the
         current market rental. The purchase of the aforesaid rental enterprises is conditional
         on GPI simultaneously selling the Epping Property and Sebenza Property for R35m
         and R9m, respectively, to Karez Trading Proprietary Limited (“Karez”). Karez is owned
         as to 50% by The Zaa Trust (registration number IT2001/99) and 50% by Namstat
         Proprietary Limited (registration number 2016/198774/07), both unrelated to GPI.

2.6.     The net effect of the transaction is that GPI will generate a loss of R22.5m (excluding
         legal and brokerage fees) which can be attributed to the cost of the indemnity provided
         by GPI. The transaction allows GPI to limit its exposure under the guarantee /indemnity
         and prevent a lengthy litigious process which would delay the implementation of GPI’s
         strategy to unlock value through a controlled sale of assets.

3.     THE ACQUISITIONS BY THE COMPANY

Particulars of the Acquisitions

3.1.     On 4 October 2022, the Company entered into a written agreement (“Gumboot Sale
         Agreement”) with Gumboot, in terms of which the Company will purchase the rental
         enterprises conducted by Gumboot at the Properties (including the Properties)
         (“Acquisitions”), from Gumboot for a purchase consideration of R45,500,000 in
         respect of the Epping Property (“Epping Purchase Consideration”) and R21,000,000
         in respect of the Sebenza Property (“Sebenza Purchase Consideration”). Gumboot
         is wholly-owned by Pointbreak Property Proprietary Limited, registration number
         2002/027488/07, which is unrelated to GPI.

Payment of the purchase consideration

3.2.     The Epping Purchase Consideration and the Sebenza Purchase Consideration is
         payable by the Company to Gumboot on the date of registration of transfer of
         ownership of the Properties into the name of the Company (“Acquisition Transfer
         Date”).

3.3.     The Epping Purchase Consideration and the Sebenza Purchase Consideration will be
         paid in cash by the Company.

Conditions Precedent

3.4.     The Acquisitions are inter-conditional and subject to the fulfilment (or, where
         applicable, waiver) of the following conditions precedent:

3.4.1.    the entry into of the Epping Sale Agreement (as defined in paragraph 4.1 below)
          between the Company and Karez and such agreement becomes unconditional in
          accordance with its terms, save for any condition therein requiring that the Gumboot
          Sale Agreement becomes unconditional and save for the condition relating to transfer
          of the Epping Property set forth in paragraph 4.4.5 below;

3.4.2.    the entry into of the Sebenza Sale Agreement (as defined in paragraph 4.7 below)
          between the Company and Karez, and such agreement becomes unconditional in
          accordance with its terms, save for any condition therein requiring that the Gumboot
          Sale Agreement becomes unconditional and save for the condition relating to transfer
          of the Sebenza Property set forth in paragraph 4.10.5 below;
3.4.3.    the entry into of the Settlement Agreement (as defined in paragraph 5.1 below)
          between Gumboot and the Company and such agreement becomes unconditional in
          accordance with its terms, save for any condition therein requiring that the Gumboot
          Sale Agreement becomes unconditional;

3.4.4.    the entry into of lease agreements between Gumboot and GPI Management Services
          Proprietary Limited (“GPIMS”) (a wholly-owned subsidiary of the Company) in terms
          whereof, inter alia, Gumboot leases the Properties to GPIMS with effect from
          1 July 2022 until the date of transfer of the Properties to Karez, save for any condition
          therein requiring that the Gumboot Sale Agreement becomes unconditional (“Lease
          Agreements”); and

3.4.5.    the shareholders of Gumboot have passed a special resolution in terms of
          section 112 read with section 115 of the Companies Act, 2008 approving the disposal
          by Gumboot of the rental enterprises conducted at the Properties (including the
          Properties),

         which conditions precedent must be fulfilled by not later than 7 October 2022, which
         date may be extended by the parties to the Gumboot Sale Agreement, in writing.

Effective date of the Acquisitions

3.5.     Possession, occupation and control of the rental enterprises conducted at the
         Properties will be given to the Company on the Acquisition Transfer Date, which is
         currently anticipated to occur by not later than 31 January 2023.

Warranties and other significant terms of the agreements

3.6.     The Sale Agreement contains representations and warranties by Gumboot in favour of
         the Company which are standard for a transaction of this nature.

4.     THE DISPOSALS BY THE COMPANY

Particulars of the Epping Sale Agreement

4.1.     On 4 October 2022, the Company, concluded a written agreement (“Epping Sale
         Agreement”) with Karez, in terms of which the Company will dispose of the rental
         enterprise conducted at the Epping Property (including the Epping Property) to be
         acquired by the Company under the Gumboot Sale Agreement, to Karez, for a
         purchase consideration of R35,000,000 (“Epping Disposal Consideration”).

Payment of the Epping Disposal Consideration

4.2.     The Epping Disposal Consideration is payable by Karez in cash to the conveyancers
         nominated under the Epping Sale Agreement, within 30 days following the signature
         date of the Epping Sale Agreement, to be held in trust by the conveyancers until the
         date on which the Epping Property is registered in the name of Karez (“Epping
         Transfer Date”), whereupon it will be paid to Gumboot.

4.3.     To the extent that Karez does not make payment of the Epping Disposal Consideration
         as contemplated in the Epping Sale Agreement, Karez will instead be required to
         provide the conveyancers with a bank guarantee acceptable to the Company, as
         security for the payment of the Epping Disposal Consideration on the Epping Transfer
         Date.

Conditions Precedent to the Epping Sale Agreement

4.4.     The Epping Sale Agreement is subject to the fulfilment (or, where applicable, waiver)
         of the following outstanding conditions precedent:

4.4.1.    the entry into of the Gumboot Sale Agreement between Gumboot and the Company,
          and such agreement becomes unconditional in accordance with its terms, save for
          any condition therein requiring that the Epping Sale Agreement becomes
          unconditional;

4.4.2.    the entry into of the Sebenza Sale Agreement between the Company and Karez, and
          such agreement becomes unconditional in accordance with its terms, save for any
          condition therein requiring that the Epping Sale Agreement becomes unconditional;

4.4.3.    the entry into of the Settlement Agreement between Gumboot and the Company and
          such agreement becomes unconditional in accordance with its terms, save for any
          condition therein requiring that the Epping Sale Agreement becomes unconditional;

4.4.4.    the entry into of the Lease Agreement in respect of the Epping Property, and such
          agreement becomes unconditional in accordance with its terms, save for any
          condition therein requiring that the Epping Sale Agreement becomes unconditional;
          and

4.4.5.    transfer of the Properties from Gumboot to the Company having taken place pursuant
          to the Gumboot Sale Agreement and the Properties being registered in the name of
          the Company,

         which conditions precedent must be fulfilled by not later than 30 November 2022, which
         date may be extended by the parties to the Epping Sale Agreement, in writing.

Effective date of the Epping Sale Agreement

4.5.     Possession, occupation and control of the rental enterprise conducted at the Epping
         Property shall be given to Karez on the Epping Transfer Date, which is currently
         anticipated to occur by not later than 31 January 2023.

Warranties and other significant terms of the Epping Sale Agreement

4.6.     The Epping Sale Agreement contains limited representations and warranties by the
         Company in favour of Karez. Subject to such warranties, the rental enterprise
         (including the Epping Property) is sold voetstoots.

Particulars of the Sebenza Sale Agreement

4.7.     On 4 October 2022, the Company, concluded a written agreement (“Sebenza Sale
         Agreement”) with Karez, in terms of which the Company will dispose of the rental
         enterprise conducted at the Sebenza Property (including the Sebenza Property) to be
         acquired by the Company under the Gumboot Sale Agreement, to Karez, for a
         purchase consideration of R9,000,000 (“Sebenza Disposal Consideration”).
Payment of the Sebenza Disposal Consideration

4.8.    The Sebenza Disposal Consideration is payable by Karez in cash to the conveyancers
        nominated under the Sebenza Sale Agreement, within 30 days following the signature
        date of the Sebenza Sale Agreement, to be held in trust by the conveyancers until the
        date on which the Sebenza Property is registered in the name of Karez (“Sebenza
        Transfer Date”), whereupon it will be paid to Gumboot.

4.9.    To the extent that Karez does not make payment of the Sebenza Disposal
        Consideration as contemplated in the Sebenza Sale Agreement, Karez will instead be
        required to provide the conveyancers with a bank guarantee acceptable to the
        Company, as security for the payment of the Sebenza Disposal Consideration on the
        Sebenza Transfer Date.

Conditions Precedent to the Sebenza Sale Agreement

4.10.   The Sebenza Sale Agreement is subject to the fulfilment (or, where applicable, waiver)
        of the following conditions precedent by 30 December 2022, which date may be
        extended by the parties to the Sebenza Sale Agreement, in writing:

4.10.1. the entry into of the Gumboot Sale Agreement between Gumboot and the Company,
        and such agreement becomes unconditional in accordance with its terms, save for
        any condition therein requiring that the Sebenza Sale Agreement becomes
        unconditional;

4.10.2. the entry into of the Epping Sale Agreement between the Company and Karez, and
        such agreement becomes unconditional in accordance with its terms, save for any
        condition therein requiring that the Sebenza Sale Agreement becomes unconditional;

4.10.3. the entry into of the Settlement Agreement between Gumboot and the Company and
        such agreement becomes unconditional in accordance with its terms, save for any
        condition therein requiring that the Sebenza Sale Agreement becomes unconditional;

4.10.4. the entry into of the Lease Agreement in respect of the Sebenza Property, and such
        agreement becomes unconditional in accordance with its terms, save for any
        condition therein requiring that the Sebenza Sale Agreement becomes unconditional;
        and

4.10.5. transfer of the Properties from Gumboot to the Company having taken place pursuant
        to the Gumboot Sale Agreement and the Properties being registered in the name of
        the Company.

Effective date of the Sebenza Sale Agreement

4.11.   Possession, occupation and control of the rental enterprise conducted at the Sebenza
        Property shall be given to Karez on the Sebenza Transfer Date, which is currently
        anticipated to occur by not later than 31January 2023.

Warranties and other significant terms of the agreements

4.12.   The Sebenza Sale Agreement contains limited representations and warranties by the
        Company in favour of Karez. Subject to such warranties, the rental enterprise
        (including the Sebenza Property) is sold voetstoots.
5.     THE SETTLEMENT AGREEMENT

Key Particulars of the Settlement Agreement

5.1.     On 4 October 2022, the Company, concluded a settlement agreement with Gumboot
         (“Settlement Agreement”), in terms whereof, inter alia, the Company and Gumboot
         agreed to fully and finally settle a dispute which had arisen between them regarding
         the Company’s liability under a guarantee and indemnity agreement entered into
         between them on 20 June 2016 (“Security Agreement”).

5.2.     The various transactions which Gumboot and the Company agreed to conclude in
         terms of the Settlement Agreement, are set out above, including the Gumboot Sale
         Agreement and the Lease Agreements.

5.3.     In addition, in terms of the Settlement Agreement, GPIMS agrees to pay rental to
         Gumboot, the further details of which are set out in paragraph 6.4 below.

5.4.     The Settlement Agreement also provides that GPI will pay legal costs to Gumboot on
         the fulfilment date under the Settlement Agreement, being in aggregate R214,000 in
         respect of the legal fees incurred by Gumboot in connection with the dispute in relation
         to the Security Agreement.

Conditions Precedent

5.5.     The Settlement Agreement is subject to the fulfilment (or, where applicable, waiver) of
         the following conditions precedent:

5.5.1.    the entry into of the Gumboot Sale Agreement between the Company and Gumboot,
          and such agreement becomes unconditional in accordance with its terms, save for
          any condition therein requiring that the Settlement Agreement becomes
          unconditional;

5.5.2.    the entry into of the Epping Sale Agreement between the Company and Karez and
          such agreement becomes unconditional in accordance with its terms, save for any
          condition therein requiring that the Settlement Agreement becomes unconditional
          and save for the condition relating to transfer of the Epping Property set forth in
          paragraph 4.4.5 above;

5.5.3.    the entry into of the Sebenza Sale Agreement between the Company and Karez, and
          such agreement becomes unconditional in accordance with its terms, save for any
          condition therein requiring that the Settlement Agreement becomes unconditional
          and save for the condition relating to transfer of the Sebenza Property set forth in
          paragraph 4.10.5 above ; and

5.5.4.    the entry into of Lease Agreements and such agreements become unconditional in
          accordance with their terms, save for any condition therein requiring that the
          Settlement Agreement becomes unconditional;

         which conditions precedent must be fulfilled by not later than 7 October 2022, which
         date may be extended by written agreement between the Company and Gumboot.
Effective date of the Settlement Agreement

5.6.     The Settlement Agreement will be implemented on the fulfilment date, being the date
         upon which the last of the conditions precedent under the Settlement Agreement are
         fulfilled or waived, as the case may be.

5.7.     The Settlement Agreement also contains two conditions subsequent being that: (i) the
         Gumboot Sale Agreement is implemented by 31 January 2023; and (ii) the Sebenza
         Sale Agreement and the Epping Sale Agreement are implemented by 31 January 2023
         (“Conditions Subsequent”). To the extent that the Conditions Subsequent are not
         fulfilled or waived by 31 January 2023 (or such later date to be agreed between the
         Company and Gumboot), then the Settlement Agreement and any of the other
         agreements which may have been concluded (i.e. the Gumboot Sale Agreement, the
         Leases, the Epping Sale Agreement and/or the Sebenza Sale Agreement) shall
         automatically terminate.

Warranties and other significant terms of the agreements

5.8.     The Settlement Agreement contains limited representations and warranties by the
         Parties.

6.     FINANCIAL INFORMATION

6.1.     The profits after tax attributable to the rental enterprise conducted at the Epping
         Property and the rental enterprise conducted at the Sebenza Property (including such
         Properties) for the previous financial period is not known to the Company as Gumboot
         is unwilling to disclose such information. Given that the rental enterprises will be
         acquired and then immediately disposed of by the Company, the Company does not
         believe that the information regarding the profits are relevant to GPI shareholders.

6.2.     Quadrant Properties Proprietary Limited was appointed as independent valuers by the
         Company, valued the land and buildings at the Epping Property as R31 000 000 (thirty
         one million Rand) and at the Sebenza Property as R11 000 000 (eleven million Rand),
         Both valuations were done as at 31 August 2022.

6.3.     The proceeds from the disposal of the rental enterprise conducted at the Epping
         Property and the rental enterprise conducted at the Sebenza Property (including such
         Properties) will be applied towards the settlement of the Epping Purchase
         Consideration and the Sebenza Purchase Consideration.

6.4.     In terms of the Lease Agreements, GPIMS will pay monthly rental to Gumboot until the
         date of transfer of the Properties to Karez as follows, which is also a term of the
         Settlement Agreement:

6.4.1.    the monthly rental for the Sebenza Property, from 1 July 2022 up until the Sebenza
          Transfer Date ("Sebenza Interim Period"), in the amount of R105,474.00 (one
          hundred and five thousand four hundred and seventy-four thousand rand) per month
          ("Sebenza Rental Costs");

6.4.2.    the monthly rental for the Epping Property, from 1 July 2022 up until the Epping
          Transfer Date ("Epping Interim Period"), in the amount of R282,704.00 (two
          hundred and eighty-two thousand seven hundred and four rand) per month ("Epping
          Rental Costs");
6.4.3.     the operational costs in respect of the Sebenza Property during the Sebenza Interim
           Period, being all amounts payable in relation to maintenance, structural and other
           charges payable by GPIMS in terms of the Lease Agreement in respect of the
           Sebenza Property (“Sebenza Operational Costs”). The indicative Sebenza
           Operational Costs based on the 12 month average for the preceding 12 months, is
           anticipated to be approximately R123,625.83 (one hundred and twenty three
           thousand six hundred and twenty five rand and eighty three cents) per month and the
           actual Sebenza Operational Costs will be invoiced by Gumboot to GPIMS on a
           monthly basis; and

6.4.4.     the operational costs in respect of the Epping Property during the Epping Interim
           Period, being all amounts payable in relation to maintenance, structural and other
           charges payable by GPIMS in terms of the Lease Agreement in respect of the Epping
           Property (“Epping Operational Costs”). The indicative Sebenza Operational Costs
           based on the 12 month average for the preceding 12 months, is anticipated to be
           approximately R153,635.73 (one hundred and fifty three thousand six hundred and
           thirty five rand and seventy three cents) per month and the actual Epping Operational
           Costs will be will be invoiced by Gumboot to GPIMS on a monthly basis;

6.5.     Gumboot will refund to GPIMS within 5 business days of receipt of such amounts –

6.5.1.     any and all rental payments from third parties actually received by Gumboot in
           respect of the Sebenza Property during the Sebenza Interim Period up to the
           maximum of the Sebenza Rental Costs;

6.5.2.     any and all rental payments from third parties actually received by Gumboot in
           respect of the Epping Property during the Epping Interim Period up to the maximum
           of the Epping Rental Costs;

6.5.3.     any and all operational costs actually received from third parties by Gumboot in
           respect of the Sebenza Properties during the Sebenza Interim Period up to the
           maximum of the actual Sebenza Operational Costs; and

6.5.4.     any and all operational costs actually received from third parties by Gumboot in
           respect of the Epping Property during the Epping Interim Period up to the maximum
           of the Epping Operational Costs.

6.6.     Gumboot will in good faith take all reasonable steps to recover all rental payments and
         operational costs from third parties in respect of the Sebenza Property and the Epping
         Property during the Sebenza Interim Period and the Epping Interim Period,
         respectively.

7.     CLASSIFICATION OF THE TRANSACTION

       When aggregated, the Acquisitions contemplated in the Gumboot Sale Agreement and
       the disposals contemplated in the Epping Sale Agreement and the Sebenza Sale
       Agreement, constitute a category 2 transaction in terms of the JSE Limited Listings
       Requirements.

Cape Town
5 October 2022
Sponsor

PSG Capital




Legal Advisor

Clyde & Co