Curtain falls on Pallinghurst as adopts pure play gems strategy

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PALLINGHURST Resources unveiled a major shift in strategy today in which it will sell down its exposure to steel feed minerals through a relisting of Jupiter Mines on the Australian Stock Exchange – a process that will see Pallinghurst renamed Gemfields and run by Pallinghurst director, Sean Gilbertson.

Arne Frandsen, CEO of Pallinghurst Resources, will then step down from the business in order to focus on an exit strategy for Sedibelo Platinum Mines in which Pallinghurst has a minority shareholding. Frandsen will be employed by Pallinghurst Capital Partners along with fellow former Pallinghurst director, Andrew Willis.

The restructuring signals the end of Pallinghurst Resources has a multi-asset investment or operating company with its shareholders now holding minority shareholdings in Jupiter Mines, which owns the high-return Tshipi manganese mine in South Africa’s Northern Cape, and a controlling stake in Gemfields, the coloured gemstones mining and marketing firm Pallinghurst took over and delisted from the London Stock Exchange last year.

Palllinghurst Resources currently holds about 357.9 million shares in Jupiter Mines which intends to list in Australia at 40 Australian cents per share. Of this stake – valued at $110.4m – Pallinghurst has agreed to sell 212 million shares worth $65.4m or A$84.8m in the currency of its listing. Pallinghurst has agreed not to sell the remainder of its Jupiter Mines stake for 20 months after listing.

But sell it will. Commenting on its shares in Jupiter and Sedibelo Platinum Mines, the company said today that these “… two minority interests would not be core … and would be available for realisation when the right opportunities might present themselves”. It added that Pallinghurst Resources would be renamed Gemfields Group.

“The Jupiter IPO and consequent sell-down of a significant part of PRL’s [Pallinghurst Resources] shareholding are important steps in our strategic development,” said Brian Gilbertson, who recently took up a non-executive position at the company.

He added that the firm’s shareholders would “… hold their interests in two essentially ‘pure play’ vehicles – Jupiter in manganese, and (a re-named) PRL in coloured gemstones. Each will focus separately and independently on developing their full values for their separate shareholders,” he said.

Commenting on Frandsen and Willis, he said that they would “… hand over a financially sound vehicle with a focussed strategy to further unlock value for shareholders”.

 

6 COMMENTS

  1. What was the point in delisting Gemfields if this was their strategy? Only reason could be to steal from Gemfields minorities and entrench management into a comfortable lifestyle company. Major shareholders, advisors and regulators should be ashamed for allowing such a blatant abuse of minorities to have transpired.

    • Totally agree!

      It was exactly that, a shake down of minority shareholders , and i pity the next round of shareholders who would safer the same fate after the relisting. I said the same when this was happening last year. I would NOT touch anything with Brian as a champion ” with a 6ft pole whilst wearing a hazard suit” . The gent eschews good corporate governance and does not have a single bone of it. He ensured that a corporate helicopter at BHP borne his initials until Don Argus intervened.

      Total abuse of minority shareholders.

  2. Fosun had offered much more value than the Pallinghurst take out, the minorities still holding Pallinghurst stock must be furious. They have systematically delisted a UK company only to reinvent it in a JE company. My guess that there was mammoth pushback from investors when they wanted to create gravy train no.2 the Pallinghurst operational company. The market didn’t bite, Sedibelo is as good a bankrupt, they are exiting Jupiter at the top of the market.
    Really the pallinghurst management should be ashamed of themselves, not only have they taken millions out of the fund as management fees (and not paid taxes on it), but they have rode rough-shot over all minorities.
    Shame on you Brian and Arne.

  3. What was the point of delisting Gemfields? Do these guys know what their plan is or are they groping in the dark?

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