Assore to delist from the JSE

The company will exit the bourse on which it has traded for 70 years.

Mining company Assore will buy out minority shareholders and delist from the Johannesburg Stock Exchange (JSE) after 70 years on the bourse, it says.

The tightly held company, which produces iron ore, manganese and chrome, has been trading on the JSE since 1950 but has decided to delist for the sake of institutional shareholders who cannot easily trade shares because of its low liquidity.

Assore is 52.4 percent held by Oresteel Investments, which is owned by the Sacco family and Japan’s Sumitomo Corporation, 26.1 percent by the Broad-Based Black Economic Empowerment (B-BBEE) entity, with the remaining 21.5 percent free float being held by various minorities. Of this small free float, 4.1 percent is held by various members of the Sacco family in their individual capacities, leaving only 17.4 percent as a “true” minority free float.

The board of Assore is proposing a scheme whereby the company will use its internal cash resources to buy back the 17.4 percent of its shares not held by Oresteel, B-BBEE or the Sacco family.

 Assore said the combination of this tightly held strategic shareholding together with the low share liquidity deterred potential institutional investors and resulted in the share price being “particularly volatile”. Assore was more suited to an unlisted environment, and its continued listing provided little benefit to strategic shareholders, it said.

The offer price is R320 a share for a total consideration of R7.8 billion.

According to the company, the tightly held strategic shareholding and the resulting low share liquidity deters potential institutional investors and leads to the share price being volatile. 

"The board and the independent board to believe that Assore is more suited to an unlisted environment, and that its continued listing provides little benefit to the strategic shareholders," the notice read.

"The board has thus proposed that Assore use its available internal cash resources to buy back all of the issued shares other than the shares held by the remaining shareholders and subsequently delist the company from the Johannesburg Stock Exchange,” it said.