[miningmx.com] — JSE-listed investment holdings group Pallinghurst
Resources has launched its latest R800m rights offer as the company prepares to
extend its reach to copper and coal.
In an announcement on Monday, Pallinghurst said the proceeds of the fundraising
exercise would be split between its investment in luxury jewellery brand Faberge
(between R202m and R243m; $25m to $30m), the steel-making materials portfolio
(between R202m and R283m; $25m and $35m) as well as an imminent new
investment in the copper sector of $40m to $50m.
As for Pallinghurst’s two remaining investment platforms, gem stones (Gemfields)
and platinum group metals (the recently established NewCo); their future funding
requirements would come from self-generated cash flows.
Existing shareholders have already committed to take up new shares to the value of
R420.3m, Pallinghurst said. The rights offer is priced at R2.24, representing a 25%
discount to the group’s 10-day weighted average price when it was first announced
on March 30. It is also priced at around a third of the group’s net asset value (NAV)
of R6.25 per share; a figure derived from the company’s year-end results for
December 2011.
The rights offer would run between July 2 and July 20.
Faberge is raising funds of its own at the moment, with Pallinghurst’s intending to
maintain its shareholding stake in the company. For the steel-making material
platform, which has Jupiter Mining as its primary asset, Pallinghurst said it may
extend its portfolio by one or two coal acquisitions.
Pallinghurst has also identified “a new copper investment opportunity in southern
Africa, comprising both producing assets and others close to production,’ according
to a company statement.
Asked whether the fundraising for the copper assets was the last box to tick before
Pallinghurst could finalise such an acquisition, Pallinghurst CEO Arne Frandsen said,
“We’ve been pursuing it for five years; and we believe it is relatively ripe to pick’.
On Monday, Pallinghurst was down 2.76% at R2.82 on thin volumes. The stock has
for some time been trading at a significant discount to NAV, an issue that
management attributed largely to a lack of the stock’s liquidity and at one staged
mooted a London-listing.
Ask whether such a move was still on the cards, Frandsen affirmed it was, but that
prevailing market conditions were not favourable.
“One has to look at market conditions,’ Frandsen said. “Both London and Hong Kong
is not covering itself in glory at the moment. In relative terms the JSE is doing much
better.’
