[miningmx.com] — PALLINGHURST Resources has approved a new rights
offering for R800m, priced at around a third of its net asset value, as the company
looks to add coal and copper properties to its asset base.
The investment holdings company on Friday reported annual results to end-December,
stating a NAV of R6.25 per share (R6.10 in 2010). The figure does not include the
effect of Thursday’s announcement on NewCo – a new consolidated platinum venture
in the Pilanesberg in which the Industrial Development Corporation has committed to
invest around R3.24bn.
CEO Arne Frandsen told Miningmx the latest renounceable rights offer at
R2.24 per share represented a 25% discount to the group’s 10-day weighted average
price. Pallinghurst’s share price, which jumped 9% on Thursday following the NewCo
announcement, gained another 3% on Friday to R3.48.
“I have yet to see the first shareholder to refuse taking part in one of our rights
offerings,’ Frandsen said. “Hopefully everyone will do the same this time.’
Pallinghurst’s portfolio consists of four platforms: Faberge (luxury goods), Gemfields
(emeralds), Jupiter Mines (steel-making materials) and NewCo/Platmin (platinum
group metals).
Frandsen said the R800m would likely go towards Faberge, as well as new
investments in coal and copper.
“We always say we will only raise funds when we need to, for a specific use,’ he said.
“We believe now is the right time.’
Pallinghurst has for some time been trading at a significant discount to NAV, an issue
that management has attributed largely to a lack of the stock’s liquidity.
Chairman Brian Gilbertson said in September the company was considering a London-
listing to increase liquidity, although no further details have emerged since then.
“The company has achieved a modest increase in its rand denominated net asset
value, but in US dollar terms, due to the significant drop in the Jupiter share price,
the company recorded a loss for the year,’ Gilbertson said in notes accompanying the
results.
“To address this, the board is continuing to explore a number of initiatives, including
an additional listing. However, our key focus is on assisting our portfolio companies in
making the right decisions in order to maximise their inherent value.’
