SEDIBELO Resources, a platinum group metal (PGM) producer, was unlikely to list this year as geopolitical uncertainty and a decline in company valuations had temporarily turned the tide against initial public offerings (IPOs), said the firm’s chairman Arne Frandsen.
However, the company had filed documents with the Securities and Exchange Commission (SEC) and the New York Stock Exchange. “We have been in this business for long enough to know that the market window opens with little notice,” said Frandsen. “When that happens, Sedibelo is ready”.
Frandsen said the peer group in the PGM sector had been suffering “real valuation challenges” and that the general market was “in a difficult spot” with the result that the IPO market was closed to mining. “We are unlikely to list in the next one to three months.”
A listing on the Johannesburg Stock Exchange was also contemplated
Frandsen said in 2020 that Sedibelo Resources, then called Sedibelo Platinum Mines (SPM), was interested in a listing. Since then, a complicated shareholder structure through which minority shareholder Gemfields indirectly owned shares in SPM has been unbundled. Gemfields now has a direct 6.5% stake.
Other shareholders in Sedibelo Resources include the Government owned Industrial Development Corporation which has a 15.7% stake and a 25.7% stake owned by the Bakgatla-Ba-Kgafela Tribe. Minority shareholders account for around 12.3% of Sedibelo’s share capital, according to the firm’s website.
Shares in Johannesburg listed PGM counters have been heavily sold down this year. Anglo American Platinum and Impala Platinum are 27% and 23% weaker year to date respectively. This comes on the back of a weakening in the average basket price for PGMs but there are also concerns that global recession will results in lower automotive production – a sector that the PGM primary market supplies.
Said Sean Gilbertson, CEO of Gemfields, of plans to list Sedibelo: “It’s certainly been a long and drawn out process. But all observers will be aware that market conditions for IPOs are currently sub-optimal”.
“The hope remains for 2023 [for a listing] subject to market conditions,” he added. “The Sedibelo team is doing a lot of background work in re-stating accounts in terms of US standards.”
Sedibelo Resources posted a basic earnings per share profit of 0.04 US cents for the six months ended June compared to a basic earnings per share profit of $1.24 for the corresponding period of the previous financial year.