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Companies
Randgold & Exploration and JCI consider merger
South African mineral company, Randgold & Exploration, and
resource finance house, JCI, are considering
a merger after being advised this is the best way to resolve a dispute between
the two companies.
Last year, Randgold chief executive, Peter Gray, revealed that massive fraud
had previously taken place involving the misappropriation of its assets - some
of these assets were found to have been used to bolster JCI, which was
previously part of the same group of companies, led by the late Brett Kebble. It
is claimed that JCI owes Randgold around £1.5bn rand.
The companies, which are both currently both suspended from their listing on
the Johannesburg Stock Exchange, had employed independent mediators to advise on
a settlement. The boards have accepted this advice and have disclosed estimates
of the value of both companies which they believe could form the basis of a
merger. These values would give 71% to 81% of the value of the merged company to
Randgold shareholders and 19% to 29% to JCI shareholders.
Some investors had expressed concerns the lack of information about the
negotiations and the apparent conflicts of interest among company directors. The
chairman of both companies is David Nurek, Peter Gray is chief executive of
Randgold and JCI and Chris Nissen is a non-executive director at both firms.
Nurek is also a director at Investec, which provided a loan to JCI.
At the Randgold AGM held last month, which was prompted by shareholders
requisitioning a meeting, two independent non-executive directors, Johann
Blersch and Thomas Dale, were voted off the board. They had been appointed last
year as part of an agreement with Trinity Asset Management and Trinity Holdings,
shareholders in JCI and Randgold, which had sought to get the companies
liquidated as part of its own claim against JCI.
Links
Randgold & Exploration
JCI
April, 2007 |
