Ghost Bites (Gemfields | Silverbridge | Thungela)

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Shiny things

Gemfields has achieved another great auction result for emeralds

Gemfields is a R4.1 billion company with a fascinating business model.

The group mines emeralds in Zambia and rubies in Mozambique. It also owns Faberge, a luxury jewellery designer that is more famous for eggs than Spur’s unreal breakfasts.

The eggs sometimes cost as much as fitting out a Spur franchise, like these little numbers at a cool R935k each:

The latest emerald auction achieved the second-highest revenues in the Kagem mine’s history, coming in at $32.0 million. Of the 34 lots offered, 33 were sold. The selling price per carat was also the second-highest on record for Kagem.

There have been 42 auctions of these gemstones since July 2009, so this isn’t an insignificant statistic.

The proceeds are repatriated to Zambia in full, with the Zambian government as a 25% shareholder in Kagem.

Silver squeeze

s124 of the Companies Act makes a rare appearance at Silverbridge Holdings

Here’s one that you won’t see every day: a compulsory acquisition under s124 of the Companies Act. An acquirer can invoke this clause when holders of over 90% of shares in issue have accepted a general offer. The latest such example relates to Silverbridge Holdings, which is being taken private by ROX Equity Partners.

It’s worth noting here that a scheme of arrangement is a different type of transaction, in which the board proposes the scheme to shareholders and gives its recommendation on the terms. If 75% approval is achieved, the scheme applies to all shareholders. It’s like a special levy in a complex – even if you hate the idea of paying to improve the park, you’re on the hook if enough residents agree.

In a general offer, it usually only applies to those who formally accept the offer. The exception is when holders of 90% of shares in issue give an acceptance, in which case s124 can be used. Unless a shareholder wants to fight this in court, the same price under the general offer will be applicable.

Frankly, I think the 6.3% of shareholders who didn’t accept the offer are being given a lifeline here. There’s no way you want to be such a minority shareholder in a tiny company.

If all goes ahead, the delisting date is 2 November.

NUM’s the word

Thungela has signed a three-year wage agreement

The National Union of Mineworkers (NUM) represents 86% of unionised employees at Thungela. A new wage agreement has been reached across Thungela’s operations, other than Mafube which runs an independent wage negotiation process.

The total labour cost-to-company is set to increase by around 6% per annum from 1 June 2022 to May 2025.

There’s also an agreement to work with the trustees of the SACO Employee Partnership Plan to enable payment of awards in the same financial year in which they are declared, rather than vesting over three years.

Little Bites

• Lesaka Technologies has given earnings guidance for the year ending June 2023. Revenue is expected to jump to between $565 million and $600 million and adjusted EBITDA should be between $31 million and $34 million. This demonstrates the value of the Connect Group acquisition, as Lesaka was loss-making in FY22.

• For the year ended June 2022, Rand Merchant Investment Holdings expects HEPS of between 159 cents and 178.2 cents, a decrease of between 7% and 17%. As a reminder, the stake in Hastings was sold and the shareholdings in Discovery and Momentum Metropolitan were unbundled, leaving behind OUTsurance as the major asset.

• Barloworld CEO Dominic Sewela has bought more shares in Barloworld, this time to the value of nearly R830k.

• Entities related to directors of Astoria have acquired shares in the company worth over R10 million.

• Stor-Age is the latest company to add a secondary listing on A2X, an exchange which provides a trading platform rather than primary issuer regulation services.

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