Pallinghurst a step closer to be­ing a ‘De Beers’ of coloured gem­stones

The Star Early Edition - - COMPANIES - Sandile Mchunu

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.

PHOTO: REUTERS

A Fabergé ring at the Gem­fields of­fice in Lon­don. Pallinghurst Re­sources has made a takeover bid for the group.

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