THARISA is to list on the London Stock Exchange in an effort to boost trading in the share which has a free-float of 25% on the Johannesburg Stock Exchange where it will remain primarily listed.
Michael Jones, CFO of the R2bn chrome and platinum group metal (PGM) producer, said today that UK and European institutional investors had shown interest in owning the share following a roadshow.
“The reception to us was one of interest although there were the usual concerns about South Africa as an investment risk. But we are a low cost producer, we are producing cash, and in the second quarter we achieved nameplate capacity on an annualised basis,” he said in an interview.
UK institutions found the firm’s Johannesburg listing a constraining factor. The stock, which is 47% held by the Pouroulis family, turns over an average of 17,600 shares daily. Phoevos Pourouis is CEO of Tharisa whilst his father, veteran and mining doyen Loucas, is chairman.
The company will, therefore, apply for admission of about 255.9 million ordinary shares on the main board of the London Stock Exchange which would also improve the firm’s international profile, it said.
There were no plans to raise cash. “We are invested in all of our required heavy capital expenditure items and we are working through our debt,” said Jones.
Tharisa produced 78,200 ounces of PGMs in the year to September, up 36.2% on the previous year, and 1.08-million tonnes of chrome concentrates, 9.1% less than last year. Its target is 144,000 oz a year of five PGMs plus gold and 1.85-million tonnes of chrome concentrate by 2016, according to a report by BDLive.
Shares in the company have been hit hard since listing in 2014, itself a decision informed by an obligation to help founding investors redeem their positions.
The stock peaked at R27/share in 2014 before falling to a low of R4 in January this year. Shares in Tharisa have recovered some of their lost ground and was last trading at R7.85/share.
Asked if investors viewed the company as either a PGM or chrome producer, Jones said there was a certain lack of knowledge about its exposure to the chrome market.
“The PGM market is fairly well understood, but we’ve had to do a bit of talking about chrome which is less understood,” he said. In terms of turnover, about 45% is derived from its chrome mining activities.
Third quarter trade in chrome is likely to be seasonally quiet in China which largely shapes the market but 2016 has seen a recovery in chrome prices. “The feedback from the [marketing] team is that there is very positive demand from China,” said Jones.
