Consortium Sekunjalo Investmen Offerc To Acquire Gold Mining Company, Pamodzi Gold
May 5th, 2009 | File Under : Mining Top News
A consortium including Sekunjalo Investments and high net-worth Middle Eastern families had offered to acquire Pamodzi Gold, the troubled gold mining firm, for $150 million (R1.27 billion), a source close to the bid said yesterday.
The consortium had made the offer to the Industrial Development Corporation (IDC), the liquidator and Pamodzi late last month in a move to acquire the gold producer, the source said, adding that this amount was part of $500m the Middle Eastern families had put down for the revival of Pamodzi Gold.
But the source said the offer was on the condition that there would be no bidding war for the troubled gold mining house and that the consortium would be allowed to conduct a due diligence audit.
“This offer is on condition of exclusivity,” the source said.
“The consortium does not want to purchase Pamodzi’s debts and does not want its hedge book.”
Sekunjalo met with joint liquidator Enver Motala of the SBT Trust, the IDC and Pamodzi Gold at the weekend.
By last night the consortium had not received a response for the offer from the IDC, the liquidator or Pamodzi.
Iqbal Surve, the executive chairman of Sekunjalo, would not discuss details of the offer, while Motala denied receiving such an offer from a consortium led by Sekunjalo.
The IDC’s Kesebone Maema would neither confirm nor deny that an offer for Pamodzi had been made.
Yesterday Cape Town-based fund manager Kokkie Kooyman said Sekunjalo could be entering risky terrain if it wanted to acquire Pamodzi.
Kooyman, the global fund manager at Sanlam Investment Management said that the move to acquire Pamodzi could be hazardous because Sekunjalo had no experience in the gold mining sector.
“What do they know about gold mining? Do they have management with experience in gold mining? I doubt if they have the management that can go into Pamodzi and turn it around while cleaning it.”
Sekunjalo is an investment holding company controlled by black business executives.
Kooyman said if Sekunjalo had the turnaround management to deal with a troubled gold mining firm like Pamodzi, it could benefit from any rise in the price of gold.
According to some South African business commentators, history suggests that higher inflation is an important trigger for a gold price increase.
Warren Buffett, the chairman of Berkshire Hathaway, said at the weekend that inflation was coming back in the US and the dollar was headed down.
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