Pallinghurst was founded in September 2007 as a limited life mining investment fund to source and develop new value accretive mining projects. This phase of Pallinghurst’s development has now been achieved with three key assets successfully developed.
- Gemfields – a leading supplier of responsibly sourced coloured gemstones;
- Tshipi – one of the lowest cost manganese producers in the world; and
- Sedibelo – a large scale open pit PGM mining operation in South Africa.
The development of these assets has created significant uplift in the net asset value of Pallinghurst. This value, however, has not been reflected in Pallinghurst’s listed share price given the complexities in the structure (including an external management company and multiple entry points into the Pallinghurst Group’s assets), complex accounting policies which makes comparison to peers difficult and which is compounded by the lack of consolidated earnings and cash flows.
To unlock value, Pallinghurst now proposes to address these issues and implement a restructuring of the group which will include:
- making an offer which, if approved and implemented, will result in Pallinghurst acquiring the entire issued and to be issued share capital of Gemfields not already owned by the Pallinghurst group (the “Offer”) and post the completion of the Offer, move to de-list Gemfields from the AIM market of the London Stock Exchange (“LSE”);
- the potential conversion to an operating mining company; and
- collapsing Pallinghurst’s investment structure and simplifying its management arrangements.
The result will be a renewed Pallinghurst with a simplified operating model and an in-house management team. The value of the underlying assets will be more clearly demonstrable with clearer earnings and operating metrics that can be benchmarked against industry peers. The revised structure model will allow Pallinghurst to rationalise costs across the group by simplifying the group’s structures.