MANTENGU Mining effectively brought the curtain down on five years of breathlessly controversial activity on the JSE announcing today its takeover by Averi, a UAE company specialising in African finance, energy and digital infrastructure.
The transaction is structured as a reverse takeover with Mantengu issuing 650 million shares for a company valued at $120m compared to Mantengu’s $60m valuation. Mantengu shareholders will own a third of the combined company.
Bloomberg News reported earlier today that Averi had considered listing in London or New York before deciding Johannesburg was best suited to its interests in South Africa and that extend into Angola and the Democratic Republic of Congo.
“A public listing will provide us better access to institutional investors and wider sources of capital, and we plan to scale and grow our portfolio,” Averi founder and CEO Gaspar Lino told the newswire. “We considered Mauritius, London and US to list, but decided the JSE is the right market for us as we continue our strategy to invest in Africa.”
As a change of control, Mantengu will have to win the support of shareholders. “The board is supportive of this exciting transaction,” the company said in a statement.
Shares in Mantengu were unmoved in early morning trade on the JSE. On a 12 month basis, the stock is down 27%.
Initially starting as a chrome producer, with potential for platinum group metals production, Mantengu caused a storm last year after former CEO Mike Miller accused the JSE of standing by while nefarious sources, including a former director, allegedly manipulated Mantengu’s share price ahead of a takeover.
He went on to claim the JSE actively participated in “naked shorting” of the company’s share price as part of a syndicate. In November, the High Court issued an interdict gagging Miller from making further accusations.
The High Court also threw out the application that sought to publish his allegations on the JSE’s Stock Exchange News Service. The High Court threw out the suit calling Mantengu’s legal manoeuver an “abuse of the court process”.
Miller stepped down in February for personal reasons. None of his various claims were proved while a case lodged with the Directorate for Priority Crime Investigation (the Hawks) was met with defamation suits from the respondents.
Magen Naidoo, the firm’s former CFO, took over as CEO.
Mantengu primarily mines chrome from the Langpan operation near Thabazimbi in the Limpopo Province. Late last year it commissioned a second ore processing facility taking its capacity to 60,000 tons a month. Operations have been disrupted, however.
Naidoo told Bloomberg News the parties had decided on a name change and would also configure management and the board ahead of shifting Mantengu’s listing to the main board of the JSE. Meanwhile, job cuts were also being negotiated after the company opted not to resume its silicon carbide production due to high electricity tariffs.
