Pallinghurst settles into new role as operator
Pallinghurst Resources has changed its strategy and is now on the hunt for new acquisitions in coloured gemstones and copper as it refines its new role in manganese as an operator rather than merely an investment holding company.
While it has been active in its investments in manganese, gemstones and platinum group metals, it has now taken over Gemfields, a London-listed emerald and ruby mining and marketing company.
The experience is within Pallinghurst to operate mines, with executive chairman Brian Gilbertson a key player in the formation of the world’s biggest mining company, BHP Billiton.
Pallinghurst’s shares have hardly shot out the lights and shareholders, in backing the transformation of the company from an investment company to an operating mining company, must be hoping the shares will begin showing some serious growth to justify the inclusion of the world’s largest coloured gemstone producer and the investment in Africa’s largest manganese miner.
Together with its partner Jupiter Mines, an Australian company, Pallinghurst is awaiting the outcome from Bank of America Merrill Lynch’s study into the best options to realise value from Jupiter’s 49% stake in the Tshipi manganese mine. The options include selling the stake, listing it or maintaining the status quo in the cash cow. Knowing Pallinghurst’s desire to be in large, profitable assets, it is highly unlikely it will be a seller of such an asset.
What shareholders can be sure of is that things have changed in the company and it can expect a more aggressive approach to assets and the value realised from them, as well as growth in its asset portfolio.
NEPI Rockcastle joint CEOs Spiro Noussis and Alex Morar are wasting no time further bulking up the company’s sprawling Central and Eastern European real estate empire. Management has already clinched two large deals worth a substantial R8.3bn since the mega-merger between New Europe Property Investments (NEPI) and Rockcastle was completed just more than two months ago.
Last week, management announced the purchase of the 66,000m² Arena Plaza in the Hungarian capital of Budapest for €275m (R4.33bn), as well as the 82,000m² Paradise Center in Sofia, Bulgaria for €252.90m (R3.98bn).
The latter, which is the largest and most visited mall in Sofia, is quite a coup for NEPI Rockcastle considering how much competition there is for prime retail assets in Bulgaria.
JSE-listed property stocks Hyprop Investments and MAS Real Estate also recently entered Bulgaria for the first time.
The Balkan nation is becoming a popular port of call for real estate investors on the back of a growing economy.
GDP growth of 3.6% and 3.3% was recorded in 2015 and 2016 respectively, with growth forecast to remain at 2.8% to 2.9% per year over the next five years.
The latest acquisitions will take NEPI Rockcastle’s portfolio to more than €5bn and give the company a presence in eight of the Central and Eastern European region’s largest markets.
NEPI Rockcastle’s share price touched a fresh high of R189.97 on Tuesday morning, following last week’s acquisitions, up 7% from the merged entity’s listing on July 12. The company has a market capitalisation of R102bn, placing it as the JSE’s largest property stock.