Thungela under attack from fraudsters seeking preference share subscriptions

THUNGELA Resources, the thermal coal miner, said today it was the target of fraudsters attempting to solicit subscribers for redeemable preference shares the company was purportedly offering.

Notices had been issued to shareholders in an email bearing the name of the Johannesburg Stock Exchange’s ‘preference shares department’.

The fraudsters ask for a transaction fee and the provide unfortunate victims with a false redeemable share certificate, said Tarryn Genis, spokesperson for Thungela.

“The purported offer amounts to share fraud and has been reported by the company to the JSE Limited, the South African Financial Sector Conduct Authority and to the United Kingdom Financial Conduct Authority for investigation,” the company said today in an announcement on the JSE News Service.

Investment interest in Thungela is high following sky-rocketing thermal coal prices which saw the company report a R6.9bn profit for the 12 months ended December.

Shares in the company have gained just over 100% on a year-to-date basis whilst its performance since it listed in June is a gain of nearly 700%.

Thungela was created after Anglo American demerged its South African coal mines in order to meet its carbon emission targets. Last week, Anglo sold its remaining 8% stake in Thungela Resources for gross proceeds of R1.67bn ($115m) through an accelerated bookbuild.

On March 22, Thungela announced a R18 per share dividend – a R2.5bn payout – and said the outlook remained strong given the spike in thermal coal prices.

The coal market oscillated between market extremes last year. In February, the price for coal ex-Newcastle (Australia) was $248 per ton. Prior to this there were concerns that the coal market would be oversupplied.

The thermal coal price was recently quoted by Goldman Sachs to be $271/t, a year-to-date increase of 54% and 178% higher on a 12 month basis.

Thungela’s payout – 63% of adjusted operating free cash flow and above its dividend policy of a minimum 30% level – suggests the company is sanguine about the market’s prospects. “Our exceptional performance shows the magnitude of what we have been able to accomplish since demerger,” said July Ndlovu, CEO of Thungela at the firm’s results.

Morgan Stanley said in a report in February that some of the supply disruptions in the coal sector may not be a fleeting phenomenon owing to Covid related absenteeism in Australia and Indonesia which were 27% below fourth quarter levels at the time of writing.

“We have been writing about the transitory nature of thermal coal’s seaborne supply disruptions for the last 1.5 years, but disruptions appear to have become rather structural,” it said.