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Village shareholders betting on Swanepoel?
Allan Seccombe
Posted: Wed, 27 Aug 2008
[miningmx.com] -- SHAREHOLDERS in JSE-listed cash shell Village Main Reef Gold Mining Company are either taking a bet that Bernard Swanepoel is going to drive up the value of the company and are hanging onto their shares, or the pricing in the offer to minority lacked appeal.
Swanepoel, the former chief executive of Harmony Gold, has formed a small investment company called To The Point Growth Specialists. It is this company that has bought a significant stake in the asset-free Village and extended an offer to minorities at R1/share.
To The Point bought a 37.8% stake in Village from Harmony Gold at R0.46/share and a further 10% from a single shareholder at R1/share, giving it a total 47.8% at a cost of R1.6m.
At the start of August it extended the offer to minorities. At the closing date of 26 August a mere 12,812 shares were sold to Swanepoel's company, lifting the stake
to 48% exactly.
Swanepoel has big plans for the cash shell and has told Miningmx he plans to conclude a transaction within six months to bring an asset into Village. It is unlikely to be one in the gold sector and highly likely to be in coal.
The next step, now that the minority offer is out of the way, is to conduct a Village rights issue to raise seed capital of around R20m, recapitalising
the company and cleaning up the corporate side of the business, like articles of association for example.
"Our first deal must be a good one that enough people will like so that if we need to raise money, if we need to, there’ll be enough support,” Swanepoel said during an interview in mid-August at modest offices north of central Johannesburg.
“Village needs to become a mining company. I really think we are talking about a six month objective of being a mining company, be it a mining investment company en route to becoming an operating company or vice versa. We will be up and running,” he said.
Village shares fell nearly 12% in a single transaction on Wednesday that left the price at R1.50 each. This is well off the high of R4/share it reached shortly after Swanepoel bought the initial two tranches of shares.
Together with former Harmony finance manager Clinton Halsey, Swanepoel has started the To The Point consultancy/advisory company. Four of
the six people at To The Point are former Harmony employees. Another, Ferdi Dippenaar, his right hand man at Harmony and now CEO of Great Basin Gold, has joined him as a non-executive director at Village.
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