Padenga to take full control of mining venture

Diversified crocodile breeder Padenga Holdings Limited is set to acquire the remaining 49,9 percent shareholding in Dallaglio Investments, which holds its mining interests, and gain full control as part of its scheme of reconstruction and restructuring.

The Victoria Falls Stock Exchange (VFEX) listed Padenga currently holds 50,1 percent stake in Dallaglio, acquired in 2019.

The mining entity has assets that include Pickstone and Peerless mines, Giant Gold Mining Claims, and Blue Rock Claims.

The group will hold an extraordinary general meeting (EGM) this month seeking shareholder approval for the transaction. Upon successful completion of the transaction, Dallaglio will become a wholly owned subsidiary of Padenga, and Padenga will remain listed on the VFEX.

Victoria Falls Stock Exchange

According to a circular issued by Padenga, the transaction will be achieved by way of a share swap, which entails the acquisition by Padenga of 8 982 Dallaglio Investments (Private) Limited shares.

This represents 49,9 percent of the equity shareholding in Dallaglio Investments (Private) Limited to be acquired in exchange for 253 003 361 Padenga ordinary shares listed on the VFEX 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 listed on the VFEX to the Dallaglio Minorities or their nominees.

The group has indicated the transaction will result in Padenga having full control of the mining business and its investments, resulting in the alignment of its operations with its objectives.

Padenga chairman Mr Bheki Sibanda said Dallaglio’s profits would fully accrue to Padenga’s shareholders, potentially improving the company’s bottom line and therefore increasing its 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.

Mr 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.

Since Padenga’s 2019 acquisition of a 50,2 percent stake in Dallaglio, there have been multiple positive developments within the mining entity such as increased gold production, which has more than doubled, reaching 1 961 kg in 2022, up from 632 kg in 2019.

“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.

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.=ebusinesseeekly