Page 65 - Stellar IAR2015

3. INVESTMENTS AT FAIR VALUE (Continued)R’000Listed investmentsTorre Industries LtdGoliath Gold Mining LtdMine Restoration Investments LtdUnlisted investmentsTellumat (Pty) LtdCadiz Holdings LtdIntegrated Equipment Rentals (Pty) Ltd Praxis Financial Services (Pty) LtdTotal investments held at fair valueTorre Industries Ltd (listed investment)GroupCompany20142014 ---STELLAR CAPITAL PARTNERS | 61The investment in Torre, comprising 34.62% of the ordinary issued share capital of Torre, was acquired on or about 26 October 2015. The purchase consideration was settled by way of:i. The issue of 390 086 494 ordinary shares in the Company at R2.00 per share; andii. Cash payment in the amount of R132.4 million,(collectively comprising the R912.6 million Transaction Value or R5.20 per Torre share).The Transaction Value represented a 16.8% premium to the 30-day VWAP of Torre on the date on which the Company published its rm intention announcement (6 July 2015 at R4.46), which management views as in line with comparable market transactions for the acquisition of marketable, non-controlling stakes in listed entities above R500 million (Market Premium). The average bid premia since 2006 for similar transactions is 26%. The Market Premium in relation to the Torre investment of 16.8% is therefore considered to be reasonable in relation to similar market transactions concluded.Management have considered the impact of the following factors in assessing the fair value of the investment in Torre:• The investment was acquired in an orderly market transaction;• The size of the investment acquired represents a signi cant marketable, non-controlling stake exceeding R500 million, which ismeasured by management as a single unit of account; and• The investment was acquired within close proximity to the measurement date.As a result of the impact of the aforementioned factors, the Torre investment has been valued at FVTPL at R900.8 million or R 5.14 per Torre share by reference to the price of recent transactions at Transaction Value, which has been adjusted downwards in the amount of R11.7 million or 6 cents per Torre share by management for the change in the 30-day VWAP of Torre shares between the date of the rm intention announcement (6 July 2015 at R4.46 per Torre share) and the close of the nancial reporting period (30 November 2015 at R4.40 per Torre share). Should management have valued the Torre investment by reference to the quoted market price at the reporting date (being a 30 day VWAP of R4.40 per Torre share), without any adjustment for the factors above, the fair value of the Torre investment would be R771.6 million.The reasonability of the fair value of the Company’s investment in Torre has been tested by reference to a discounted cash ow model, the input ranges of which are set out below:2015914 859900 833 - 14 026234 509100 119 134 390 - -3 267- 316 2 951-- - - -2015914 859900 833 - 14 026234 509100 119 134 390 - -- - -- - - -1 149 3683 2671 149 368