Assore to delist from the JSE after 70 years
It announced that it will de-list through a R7.8 billion share buyback programme for minority shareholders
ASSORE, the JSE-listed mining company surged 81.86 percent on the JSE yesterday to R314.25 a share as the market digested news of its plan to de-list from the JSE after 70 years on the main bourse.
Assore yesterday announced that it was best suited in an unlisted environment, saying that it would de-list from the JSE through a R7.8 billion share buyback programme for minority shareholders.
“The combination of this tightly held strategic shareholding and the resultant low share liquidity, which both deters potential institutional investors and results in the share price being particularly volatile, has led the remaining shareholders, the board and the independent board members to believe that Assore is more suited to an unlisted environment, and that its continued listing provides little benefit to the strategic shareholders,” the company said.
Last year saw more than 20 companies de-list from the JSE amid a weak economic environment.
Assore, which is involved in mining iron, manganese and chrome ores, has been listed on the JSE since 1950, is 52.4 percent owned by Oresteel, controlled by the Sacco family; a 26.1 percent black economic empowerment stake, while a 4.1 percent stake is held by various members of the Sacco family.
The company, which operates the Assmang mine jointly with African
Rainbow Minerals (ARM), said eligible shareholders were allowed to decide to dispose of all their shares at an offer of R320 a share.
Seleho Tsatsi, an investment analyst at Anchor capital, said that the de-listing was good news for Assore shareholders.
“The share is tightly held with the Sacco family and Assore’s BEE partner together owning 82.6 percent of shares at the moment. Given how tightly the share has been held it has been quite an illiquid share. From the Sacco family’s point of view, R330 per share looks like an attractive price at which to buy out minority shareholders and perhaps not have to deal with the administration associated with being listed,” Tsatsi said.
Assore in tandem with its competitors is grappling with a low benchmark price for ferrochrome as a result of weakening global stainless steel.
The group last month announced that its headline earnings a share for the six months ended December 2019 had plunged by 28 percent to R2.1 billion, compared to R2.9bn for the year earlier. It said that Assmang had recorded headline earnings of R3.7bn, down 14 percent compared to R4.3bn a year earlier. Asmang’s operations are the Beeshoek and Khumani iron-ore mines and Black Rock’s Nchwaning and Gloria manganese ore mines in the Northern Cape.
Assore also operates the Dwarsrivier Chrome Mine in Limpopo, whose operations reported a 68 percent decline in headline earnings in the six months ended December 2019.
ASSORE announced that it was best suited in an unlisted environment. |