eBusiness Weekly
Nelson Gahadza
Padenga Holdings is set to acquire the remaining 49.9 percent shares in Dallaglio Investments and gain full control as part of its scheme of reconstruction and restructuring.
Currently, Dallaglio is 50,1 percent owned by Victoria Falls Stock Exchange (VFEX) listed Padenga Holdings, and its assets include Pickstone and Peerless mines, Giant Gold Mining Claims, and Blue Rock Claims.
According to a circular issued by Padenga, the transaction will be achieved by way of a share swap through the acquisition by Padenga Holdings Limited of 8,982 Dallaglio Investments (Private) Limited shares.
This represents 49,9 percent of the equity shareholding in Dallaglio Investments (Private) Limited in exchange for the issuance of 253 003 361 Padenga Holdings Limited ordinary shares listed on the Victoria Falls Stock Exchange and incorporated.
According to the circular, a meeting of the Board held on June 13, 2023, considered and identified a potential opportunity for the restructuring of the group through the acquisition of the remaining issued share capital in Dallaglio following the acquisition of 50.1 percent of the issued share capital in Dallaglio in 2019.
The negotiated value of the acquisition of Dallaglio is to be settled through the issuance of 253 003 361 Padenga ordinary shares that are listed on the VFEX to the Dallaglio Minorities or their nominees.
Themba Sibanda, the group’s chairman, said the acquisition transaction will result in the Group having full control of the mining business and its investments, resulting in the alignment of its operations with Padenga’s objectives.
He said Dallaglio’s profits would fully accrue to Padenga’s shareholders, potentially improving the company’s bottom line and therefore increasing Padenga’s consolidated earnings per share.
“The proposed structure would result in Padenga having a larger asset base that could be leveraged for capital raising for expansion,” he said.
Sibanda added that the new consolidated entity is anticipated to trade at a higher value than the current one, resulting in increased value for Padenga shareholders.
“Resultantly, the execution of the acquisition of the remaining issued shares in Dallaglio would result in great value for Padenga shareholders,” he said.
The company will seek shareholder approval of the transaction at an extra-ordinary general meeting to be held next month.
According to the circular, since the acquisition of 50.1 percent of Dallaglio in 2019, there have been multiple positive developments within Dallaglio.
Part of the developments include gold production, which has more than doubled, reaching 1,961 kg in 2022, up from 632 kg in 2019.
In 2021, Eureka Mine, one of the largest and most technologically advanced gold mines in Zimbabwe, was commissioned by President Mnangagwa.
“Extensive expansionary expenditure has been underway and the gold price has been rallying, whose combined effect is expected to result in significant increases in profits over the next few years,” the company said.
On successful completion of the transaction, Dallaglio will become a wholly owned subsidiary of Padenga and Padenga will remain listed on the VFEX.
Meanwhile, Padenga is also considering abandoning the loss-making alligator skin operation in the United States, as this will allow the listed firm to focus on core businesses while also easing the burden the department has had on the group.
At an annual general meeting held last month, chief executive officer Gary John Sharp, said Padenga will spend about US$2 million on capital expenditures for the crocodile division.
This comes as the group is working on crocodile pen rehabilitation, which is essential to attempts to increase skin quality.
In 2022, the group generated US$127,89 million in revenue, which was a 68 percent increase from US$76,10 million in 2021.
