Pallinghurst a step closer to being a ‘De Beers’ of coloured gemstones
PALLINGHURST Resources shareholders have voted in favour of restructuring the company and the acquisition of Gemfields in an annual general meeting in Guernsey yesterday.
Pallinghurst already owns 47 percent of Gemfields, one of the world’s biggest miners of coloured gemstones, and is also the owner of the Fabergé jewellery brand.
In May, Pallinghurst offered to buy the remaining 52.91 percent stake it did not already own for about £111.9 million (R1.9 billion).
The takeover is part of a strategy by Pallinghurst to restructure into a fully-fledged operating company, which may see the absorption of its other investments.
It involves cancelling a management agreement in the current investment company structure and enrolling the principal managers including executive chairperson Brian Gilbertson, chief executive Arne Frandsen and chief financial officer Andrew Willis as salaried employees.
Gemfields is valued at about £211m.
Frandsen said: “The revitalisation of Gemfields operations is urgently needed given its tight financial circumstances. It is therefore Pallinghurst’s objective to facilitate the handover in a quick and seamless way to provide operational stability and retain shareholder value.
With debt levels at Gemfields at a high, the need for conservative financial management is evident.”
He added further investments in the operations would be sought to secure profitable expansion and growth.
Pallinghurst said almost 90 percent of Gemfields shareholders had accepted the offer.
Pallinghurst said it intended to integrate the Gemfields business to maximise cost savings, unlock value for Pallinghurst shareholders and develop Gemfields in full as the “De Beers” of coloured gemstones.
The meeting also signalled the end of tenures for two of Pallinghurst directors, Clive Harris and Stuart Platt-Ransom, after 10 years of service, who resigned before the meeting. Both have resigned as independent non-executive directors and from all board committees with effect from Tuesday.
Gilbertson paid tribute to the directors who stepped down as a result of some shareholders who had made it known they would oppose their reappointment. “We shall seek to engage promptly with those shareholders to establish and address their concerns,” Gilbertson said.
A Fabergé ring at the Gemfields office in London. Pallinghurst Resources has made a takeover bid for the group.