Charlotte Mathews
14 January 2009
Johannesburg — TO THE Point Growth Specialists - the largest shareholder in Village Main Reef - is considering investment opportunities in coal because underlying demand for coal remains strong, but funding is as difficult to secure for coal companies as in any other commodity.
To The Point director Bernard Swanepoel said that after the JSE's recent ruling on Village Main's planned share issue to raise R20m, it would be necessary for Village Main to have identified an investment opportunity before it raised new capital from shareholders.
A strategy would be discussed at Village's board meeting next month. It could then take another five or six months to conclude a deal.
Swanepoel said the company was not afraid to make commitments but under current market conditions it was better to "wait and see".
In November, the JSE ruled that although Village had issued a circular to shareholders on a restructuring of its share capital, and shareholders had approved the proposals, the move would change Village from a "curtailed operation" to a "cash shell". Because of that, Village shares were likely to be suspended after the offer was implemented. To The Point decided not to go ahead with the capital raising after the ruling.
Swanepoel is a former CEO of Harmony Gold. His move into Village, with plans to add growth investments, pushed its share price to a speculative peak of 400c last July from about 21c. The shares are now about 90c.
Be the first to Write a Comment!
Copyright © 2009 Business Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
