Grit Real Estate Income Group Limited (JSE:GTR) entered into a sale and purchase agreement to acquire Société Immobiliére et de Gestion Hôteliére du cap Skirring (SIGHC) from Club Med SAS for €15.6 million on July 23, 2019. Under the terms of the agreement, Grit Real Estate Income Group will acquire 100% of the shares in SIGHC, the owner of the property known as Club Med Cap Skirring (property), and the rental enterprise conducted by SIGHC on the property, as a going concern. Société Immobiliére et de Gestion Hôteliére du cap Skirring will be acquired for a provisional purchase consideration of €11.6 million, subject to adjustments and settlement of Intra-Group Loan. The provisional purchase consideration of €11.6 million will be paid on the completion date in addition to the settlement of the Inter-Group Loan balances as at that date. The provisional balance of the Intra-Group Loan to be assigned at September 30, 2019 is €4 million. The final purchase consideration will be determined by using the final balance sheet and profit and loss statements of SIGHC after the completion date. Provided that the final purchase consideration plus the settlement of the Intergroup loans shall not exceed €20 million, the difference between the final purchase consideration and the provisional purchase considerations will be settled between the parties in cash. Under the terms of the agreement, Club Med, acting on behalf of SIGHC, will renovate part of the hotel and expand it at a development cost of €25 million, capped at €28 million. For the year ended December 31, 2018, The value of the net assets comprising the rental enterprise was €2.2 million and profits after tax attributable to the rental enterprise was €0.4 million. The completion of the deal is subject to Grit Real Estate Income Group securing a firm offer for bank funding, from one of several top ranking banks, Club Med SAS providing Grit Real Estate Income Group with further documentary evidences that the property is free of any charge, mortgage or encumbrances and that SIGHC is the rightful owner of the property; documentary evidence of the lawful erection and occupation of the constructions located on (or close to) the waterfront, which are included in the property; documentary evidence of the wire transfers of funds made available by the Club Med to Grit Real Estate Income Group under the Intra-Group Loan and written confirmation by the bank holding SIGHC's bank accounts that, following the assignment of the Intra-Group Loan, the bank will transfer any reimbursements under the Intra -Group Loan to Grit Real Estate Income Group. The conditions precedent must be fulfilled (or waived) by no later than December 1, 2019. If any or all of the conditions precedent are not duly fulfilled (or waived) by December 20, 2019, the agreement will be obsolete and void as of right and the parties will be released from any and all obligations with regard to each other. The completion of the acquisition is expected to occur no later than December 20, 2019. William Marle, Scott Mathieson, Matthew Radley (Corporate Finance), Mark Whitfeld (Sales) and Monica Tepes (Research) of FinnCap Ltd. acted as financial advsiors and David Tosi of PSG Capital (Pty) Limited acted as JSE sponsor and corporate advisor to Grit Real Estate Income Group Limited.