Vedanta Resources delists from the London Stock Exchange

Effective from today, Vedanta Resources (hereafter Vedanta) has been delisted from the London Stock Exchange. Now, the group should be 100%-owned by Volcan Investments – which is controlled by the Agarwal family. As of the last reporting period (i.e. June-ending quarter), Vedanta had total borrowings of $15.9bn, and cash and liquid investments of $5.2bn – of which the majority was held at the Indian subsidiaries.

SP Angel – Morning View

Gem Diamonds (GEMD LN) –Record half year tender revenues | Vedanta (VED LN) – Volcan offer document posted

Vedanta to shun London listing?

Volcan Investments – Vedanta Resources’ (hereafter Vedanta or the company) largest shareholder and Anil Agarwal’s family trust – and an Independent Committee of Vedanta’s board have reached an in-principle agreement for a cash offer from Volcan to buyout Vedanta’s free-float shares (33.47%), thereby proposing to delist the Indian natural resources giant from the UK. The offer price of 825p per share (28% premium on 29 June 2018 closing price) values Vedanta at £2.3bn, and would require a cash ou

SP Angel – Morning View

Centamin (CEY LN) – Revising 2018 production guidance. | Keras Resources PLC (KRS LN) – Interim results and update | Orosur Mining (OMI LN) – Withdrawing from Chilean gold exploration project | Strategic Minerals* (SML LN) – Next phase of drilling at Redmoor | Vedanta (VED LN) – Tamil Nadu state pollution control board seeks to permanently close Tuticorin IsaSmelt smelter following death of 13 protestors

Despite supportive prices, impairments will weigh on FY18 bottom-line

A strong pricing rebound for most commodities has helped the group maintain strong dividend flows across key businesses and, as a result, avert a debt crisis. However, a series of disruptive events could take a near-term toll on India’s commodity appetite and, hence, on Vedanta’s prospects. The recent iron ore mining ban-induced impairments is an added pain.

Decoding Anil Agarwal’s mission ‘Anglo American’

In 2017, Anil Agarwal (Vedanta Resources’ Chairman) via his family trust, Volcan Investments (Vedanta’s largest shareholder – c.69% stake), acquired a 19.4% stake in Anglo American. The stake was amassed in two tranches during April 2017 and October 2017. The deal structure (details in our latests dated 17 March 2017 and 6 October 2017) was intriguing, with the funding requirements being fulfilled via issuance of mandatory exchangeable bonds. Volcan did, however, securitise c.92m Vedanta Resourc

Vedanta’s promoters to emerge as Anglo’s largest shareholder

According to the regulatory release filed with the London Stock Exchange on 20 September 2017, Volcan Investments Limited – Vedanta Resources’ largest shareholder (c.70% stake) – announced its intention to invest £1.25-1.5bn in Anglo American’s (Anglo) shares. This would be in addition to its earlier c.£2bn investment in April 2017 – which translated into a 12.43% voting interest (excluding shares for which voting rights have been waived). Similar to the last investment, the transaction would b

Operating improvements (along with piecemeal deleveraging) continue

After a strong turnaround in FY17, when Vedanta managed to achieve operating margins of 19% (comparable with the prior year’s) and trimmed its net losses to just $23m (vs. $1.8bn in FY16), even FY18 embarked on a promising note. The continuation of strong commodity markets (particularly zinc: +35% yoy and aluminium: +21% yoy) resulted in Q1 sales coming in at $3.1bn (+32% yoy). Although qoq sales were down 14% due to both subdued volumes (with zinc impacted by an exceptional Q4 FY17, power due t

Vedanta’s jolted top-brass

Citing personal reasons, Tom Albanese (Vedanta’s CEO) has decided not to extend his contract, which was due to expire on 31 March 2017. Although he will continue to hold the position until 31 August 2017, while his replacement is being identified. Some of the news articles about Tom’s exit also mention that Cynthia Carroll left Vedanta last month. We are surprised since the company never released any official statement regarding her exit, while it did issue a press release when she joined the g

Vedanta’s promoters eyeing a (strategic?) stake in Anglo American

Vedanta Resources’ (Vedanta) largest shareholder – Volcan Investments (c.70%), a company owned by the Anil Agarwal (Vedanta’s Chairman) family trust – is reportedly buying shares worth £2bn in Anglo American (Anglo). This development has been confirmed by Vedanta, with the clarification that the group is ‘not’ a participant in the proposed investment. So far there has been no official comment from Anglo. Based on Anglo’s 15 March 2017 closing price, a £2bn investment would translate into a 13%

H1 rekindles hope of a turnaround

After two gruesome years (FY15-16), Vedanta Resources’ H1 FY17 performance should finally help calm a lot of nerves. The recovery in profitability across (most) divisions was the key highlight. The top-line remained weak ($4.9bn; -15% yoy; -3.4% hoh), as: 1/ zinc output was still below potential (-37% yoy; -29% hoh); and 2/ yoy average copper and oil prices were down 16% and 18%, respectively. Fading sequential (hoh) pressure was largely attributable to a broader rebound in most commodity prices

Revised merger terms; LIC’s vote would be critical

After more than a year since the merger between Vedanta Limited and Cairn India was announced in June 2015, Vedanta has finally revised the deal terms. While Cairn’s minority shareholders would still get one share in the merged entity for every share held, the number of redeemable preference shares (@7.5% coupon, 18 months tenure and face value of INR10) has been increased from one to four. As mentioned in the press release, this revised offer translates into a 20% premium over Cairn India’s one

Another weak full-year performance

The impact of extreme market difficulties was evident in Vedanta Resources’ FY16 (March-ending) results. While the company achieved record production in most commodities, lower prices (most severe in oil – down 44%) led to a 17% correction in full-year sales to $10.7bn. The impact of pricing pressure was more acute in H2 with the top-line correcting 22%. Similar to other miners, profitability slumped to record lows, with adjusted EBIT of $303m (-57%) and $881m (-49%) in H2 and FY16, respectively

SP Angel Morning Report

Central Asia Metals | Kefi Minerals | Kibo Mining | Vedanta Resources

NextSource Materials - Initiation

NextSource is uniquely positioned to build a leading vertically integrated position, ex China, in the supply of Lithium-ion battery anode material which is essential for the Energy Transition. The company is commissioning phase 1 of its world-class Molo graphite mine in Madagascar and is in the final permitting process for its first Battery Anode Facility (BAF) to be located in Mauritius. The company is backed by Vision Blue, established by Sir Mick Davis, former CEO of Xstrata. On our calculat

Falcon Oil & Gas - Funding a Multi TCF Resource

Falcon has raised gross proceeds of US$8.9m via a placing and subscription at a price of 6p/share and the granting of overriding royalty interests. The net proceeds, together with Falcon’s existing cash resources (cUS$4.3m) will be used to fund Falcon’s net share of 2024 capex (cUS$9m) associated with the 40MMscf/d Shenandoah South Pilot Project, including the drilling, stimulation, and flow testing of two 10,000ft horizontal wells. The funds will also enable Falcon to fund its share of the cost

Initiation of Coverage - Critical raw materials for Europe’s green transition

Beowulf is advancing a portfolio of projects in Europe focussed on metals and minerals that are critical to enabling the continent’s transition to a greener economy. Awareness of Europe’s over-reliance on external supply sources for such vital raw materials is driving growing political support for ‘home-grown’ projects. Beowulf is strategically positioned to leverage this fast-evolving trend – its Kallak project in Sweden holds potential to deliver high-quality iron ore to lower the carbon-inten

Morning Note – 22 April 2024

Morning Note – 24 April 2024

Sintana Energy Inc. (TSX-V: SEI): Constrained test rate of 14 mboe/d at Mopane-1X. 10+ bn boe in place confirmed.

• Multiple tests over multiple zones in multiple horizons were run at the Mopane-1X exploration well. The flows achieved during the well test reached the maximum allowed limits of 14 mboe/d. The flow rate was constrained by the size of the available surface facilities. • The AVO-1 horizon encountered at Mopane-1X and Mopane-2X are in the same pressure regime, suggesting that the entire area (8 km diameter) between the two wells is connected. Overall, in the Mopane complex alone, and before dril

Touchstone Exploration+ (TXP, House Stock at 44p) - Closing of expanded bank facilities

LIBERUM: Ferrexpo: Production triples

SP Angel Morning View: Gold prices slide following profit taking as traders look to US data

Jubilee Metals - Operational Update Q3 FY2024

Jubilee today reports its Q3 and third quarter operational results from its expanding operations in Zambia (copper) and South Africa (chrome and PGM). South Africa is on a growth trajectory with record chrome production of 409kt in the quarter (Q2 FY2024 381kt) and a monthly record in March of 145kt and production YTD of 1.13Mt (0.94Mt). Jubilee is well underway to its annual target capacity of 2,1Mt/yr especially with the new 300kt/yr chrome plant at Thutse expected to be operational in August

SP Angel Morning View: Copper prices hit $9,700/t as China smelts concentrates for zero charge Tc/Rc

Hybridan Small Cap Feast - 24 April 24

24th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

Transition to Mining Operator

Adriatic Metals has announced their transition from mining contractor to mining operator at Rupice. The transition is expected to continue to benefit the development and productivity rates being achieved at Rupice mine, as well as result in cost efficiencies and improved HSE standards. The company has also announced a short-term loan facility with Orion of $25m, that is drawable at the option of the company in Q3/4 this year.

Alien Metals - Hancock Project, Mining Lease Granted

Alien today reports intraday that the Western Australian Government has granted a mining licence for the Hancock iron ore project for a 21-year term. The granting of the mining licence is the latest milestone delivered by Alien as it advances the project towards development and production.

I3 Energy (I3E LN) - Canada royalty assets sale

I3 has announced the sale of the majority of its royalty interests in Canada, for US$24.8m cash. This allows the company to fully repay amounts drawn on its debt facility and create a working capital surplus, giving I3 significant additional funding flexibility going forward