Grand Parade Investments’ founder reduces stake amid retirement plans

SOUTH AFRICA – Grand Parade Investments’ (GPI) founder and executive chair, Hassen Adams, has reduced his holding in the South African restaurant and gaming group by 37.6% and unveiled plans of retiring from the position this year.    

According to a report by Business Day, Adams held 63.8 million shares, equivalent to a 13.47% stake in the group but early this week sold 20-million of his shares for US$4.29 million (R60 million).

This subsequently reduced his stake in the frim to about 8.4% reflecting a 37.6% reduction.

Following the disposal, the founder is currently the third-largest shareholder after the Chandos Trust, which is aligned to former banker GT Ferreira, with a holding of 9.94% and Value Capital Partners (VCP)-an empowerment group- which controls a 16.42% stake.

However, VCP -which also has stakes in Sun International, Altron, Novus, Adcorp, PPC and African Phoenix- only took its holding in GPI in December 2018.

The empowerment group was also not part of a grouping of minority investors that were critical of the group’s management.

This also comes at a time when the group is struggling to sustain its business especially under its fast food chain segment after it announced the shutting down its Dunkin’ Donuts and Baskin-Robbins chains earlier this year.

In May 2018, the Johannesburg stock exchange listed firm also announced that it would reduce part of its 18.5% stake held in the steakhouse restaurant chain Spur Corporation as it shifts focus to the Burger King brand.

However, recent performance of the fast food chain outlet have revealed that its initial roll-out did not go smoothly.

While presenting its 2018 annual report, GPI said that it had made progress in turning around Burger King and was looking to bring in an outside shareholder once it became profitable.

GPI said that it has plans of opening 15 new Burger King outlets a year over the next three years across the country to help boost its revenues.

As at the end of December 2018, Grand Parade owned 90 Burger King outlets of which 84 are corporate owned and six were franchisees.

The group has also managed to stabilise its management after recent calls by shareholders for a shake-up of the board of directors for better corporate governance following a spate of executive departures that saw three chief executives depart in less than two years.

Early this year, GPI appointed Mohsin Tajbhai as acting chief executive in its strategy to streamline its business and shore up its investor’s confidence.

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