Next step in the Marshalls game plan
WHEN I WROTE about the proposed merger of Marshalls and Marshall Monteagle on this magazine’s associated website, fin24.co.za on 11 January, I suggested it might only be the first step in a consolidation of companies broadly associated with Durban-born financier David Marshall.
And so it’s proved, with the announcement that Marshall Monteagle and its 49,95% owned subsidiary Halogen have sold their Zimbabwean gold mining interests. Marshall Monteagle is selling its onethird of the Olympus mine for US$351 000 (R2,5m) cash and $421 000 (R3m) in 1,8m shares in AIM-listed Central African Gold. Halogen is selling its 57% of Falcon and two-thirds of Olympus to CAG for $2,8m (R20m) cash and 7,2m CAG shares.
Both will reserve about 2% of the gross proceeds for pension and similar benefits for ex-employees.
This is a nice little earner but no big deal for Marshall Monteagle – even less so after its merger with Marshalls, which appears to be on course – but Halogen is basically a shell with cash of about R2m. It long ago wrote off its Zimbabwean assets. Its cash inflow is about R20m, and the CAG shares, last quoted at 12,5p, are worth another £1,08m, or R15,2m, boosting its NAV to about R37,2m, against a market cap of R19,7m.
I’m afraid you can’t take advantage of this, though, as the share seldom trades and the annual price range on the JSE must set some sort of record, with only a 5c difference between a high of 1 060c and low of 1 055c.
The sales will hardly give the group any voice in CAG which, after a fund-raiser late last year, had 476m shares in issue. As a matter of interest, though, it’s run by ex-Metallon CEO Greg Hunter, and Afriplats CEO Roy Pitchford is a nonexecutive director.