Next step in the Mar­shalls game plan

Finweek English Edition - - Companies & markets -

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.

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