Johannesburg - South African private equity firm, Pallinghurst Resources, on Friday took full control of Australian de-listed gemstone miner, Gemfields plc and commenced a strategic review to revive the company.
Pallinghurst said a thorough review and analysis of the operations, including processes, plans, budgets and financial position was underway. The outcome of this analysis would form the basis for an updated development plan for Gemfields.
Gemfields, one of the world’s biggest miners of coloured gemstones, and the owner of the Faberge jewellery brand, was de-listed from AIM at the end of July and is now an unlisted subsidiary of Pallinghurst.
Gemfields has mining operations in Zambia for emeralds and amethysts, in Mozambique for ruby and pink sapphire, and is actively examining opportunities in other key gemstone producing countries around the globe.
As a result of the de-listing, the non-executive directors of Gemfields have resigned, including the chief executive and the chief financial officer. Pallinghurst has since reconstituted the board and management of Gemfields with appointments of experienced executives.
Gemfields’ debt is currently at record levels, caused in large measure by a material drop in emerald production at Kagem mine in Zambia and resulting in a U.S.$54 million year-on-year decline in Kagem’s auction revenues for the year ending 30 June.
The advisory and break fees incurred by the previous Gemfields board in opposing the Pallinghurst offer, and totalling approximately U.S.$7 million, have further exacerbated present challenges.
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It is expected that Gemfields will be 100 percent owned by Pallinghurst by the end of August 2017 after Pallinghurst shareholders in June voted in favour of its acquisition.
Pallinghurst said it intends to report the findings of its strategic review to its Board by mid-September, and would engage with shareholders shortly thereafter.
Pallinghurst chairman, Brian Gilbertson, said: "Gemfields is a uniquely attractive business with strong growth potential. We intend to focus on profitability in pursuit of the vision of building the "De Beers of coloured gemstones".
AFRICAN NEWS AGENCY