SA’s Mvela says won’t de-list if secures buy

JOHANNESBURG – South Africa’s black-owned Mvelaphanda Resources (Mvela) may not de-list as it had warned earlier this year if it was successful in making a ‘significant’ acquisition, a company official said on Tuesday.

Mvela, which has a 63 per cent stake in Northam Platinum, said earlier on Tuesday it was in negotiations that could lead to an acquisition that would require the approval of shareholders and could impact its share price.
In February Mvela said it may de-list to comply with JSE Securities Exchange Ltd rules, which say a listed firm should not generate more than half its earnings from an investment in another listed company, or have more than three quarters of its net asset value tied up in such a listed firm.
Under the rule Mvela was classified as a pyramid company and had to de-list because it earns more than 50 per cent of its income from Northam, and 75 per cent of its net asset value in the platinum producer.
‘If it is a significant acquisition it will reduce our reliance on Northam for our net asset value and income and we won’t be in contravention of stock exchange regulations so we may not de-list,’ James Wellsted, Mvela’s head of investor relations later said.
Mvela’s stock closed 3,3 per cent down at 32,21 rand, against a 0,31 per cent gain on the All Share index.
A de-listed Mvela would dent hopes of expanding black ownership of mining companies following years of exclusion of blacks from the economy under apartheid.
Wellsted said Mvela would conduct due diligence on the unmentioned company it was seeking to acquire and would report back on its progress to the market in about two months time. The company advised shareholders to exercise caution when dealing with shares until further notice.
Earlier this year Mvela and Northam were the target of a failed cash-and-shares bid by rival Impala Platinum, which wanted to build a South African platinum champion, but the talks ended due to the difficult global economic climate.
Impala said at the time it might revisit the deal in the future.
– Nampa-Reuters