MAGNI Investment Holdings, formerly known as Lurco, is to take a majority stake in Johannesburg-listed Sable Exploration and Mining Limited (SEAM) ahead of a reverse listing of its mining assets.
Lurco has about 1.5 million tons of annual coal production, according to its website. It began operating in 2010 by trading coal and supplying some of it to local hospitals. In 2019, it unsuccessfully bid for control of Optimum Coal Mine – the Mpumalanga thermal coal mine once operated by Gupta company, Tegeta Exploration & Resources.
SEAM was previously known as Middle East Diamond Resources and before that it was Stable Platinum, a company listed in 2012 by diamond sector investment analysts James Allan and René Hochreiter.
Magni Investment Holdings (MiH) said in an announcement today that ahead of the reverse listing SEAM would launch a rights issue for a total of R50m. MiH will flip some of its assets into SEAM “… to enable growth, sustainable value and better returns for investors”.
In addition, MiH had agreed a share subscription facility of up to R4.45bn for three years following the reverse listing with Global Emerging Markets, a company described as “an alternative investment group”. MiH will then issue warrants to GEM to purchase for a period of five years post the listing up to 8.3% of total SEAM shares in issue.
“For MiH, this deal unlocks value and accelerates growth for us a medium sized commodity player in South Africa,” said Ellington Nxumalo, co-founder of MiH in a statement. The operations to be acquired by SEAM are cash generative and has the potential to generate cash flow in the short term, said MiH.