Egyptian ‘Goldfinger’ targets African expansion

Egyptian billionaire Naguib Sawiris is bullish on gold mine investments. (Reuters)
Updated 07 October 2018
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Egyptian ‘Goldfinger’ targets African expansion

  • Sawiris is estimated to be worth $4 billion by Forbes
  • Sees attractive valuations in African gold mining assets

LONDON: La Mancha Holding, the mining investment vehicle headed by Naguib Sawiris, is looking at more gold acquisitions in Africa, Arab News can reveal.
In June, the private, Luxembourg-headquartered company headed by the billionaire Egyptian businessman shelled out $126 million for a 30 percent stake in Toronto-listed Golden Star, owner of two gold mines in Ghana. La Mancha already owns 30 percent of another gold company, Endeavour Mining with gold assets in West Africa. It also has significant stake in Australian gold miner Evolution.
But Africa appears to be the main target, for now. La Mancha’s new chief financial officer, Beirut-born Karim-Michel Nasr said: “We are interested in M&A, although we are not empire builders — our aim is to build shareholder value, any acquisition has to be value accretive.”
The company would look at potential mining targets in west and central Africa but “not southern Africa,” said Nasr.
Andrew Breichmanas, mining analyst at BMO Capital Markets, said that, given Sawiris’ track record in bolstering the value of Endeavour and Evolution, “there is every reason to be bullish about [his] strategy going forward. Sawiris is viewed as a successful operator,” he said.
The market worth of Endeavour and Evolution since he bought into them in 2015 had rocketed by 290 percent and 267 percent respectively, according to a La Mancha presentation on its website.
Sawiris, reckoned to be worth almost $4 billion by Forbes, has the financial firepower to allow Golden Star or La Mancha itself to go out and do other deals,” said Breichmanas.
La Mancha’s approach to date has been to inject both cash and assets into new investments, “improving the scale of those assets, and trading off [selling] those at the bottom of the quality curve,” Jonathan Guy, an analyst at Numis Securities, said in an interview with Mining Journal this week.
Half of Sawiris’s personal net worth is today locked into gold company investments, the Egyptian recently told Fox News. Gold mining companies had underperformed the gold price by a significant margin this year, down 27 percent according to the New York Arca Gold Bugs index, against the metal’s 9 percent slide. And that meant Sawiris could see the opportunity to pick up undervalued mining assets.
Breichmanas backed that general drift, saying: “If you look at valuations for gold companies they are relatively attractive as they trade at a discount to the prevailing gold price. So, you could certainly make the case that there is value within the sector.”
Gold M&A is being propelled during a period when there is relatively little new supply coming on stream, and companies view mergers as the easiest and quickest way to expand their asset portfolios. Executives see tie-ups as less risky and less costly than developing new mines, sometimes in challenging geographies. Last week, one of the biggest gold mergers of recent years was cemented when Barrick Gold of Canada unveiled an agreed takeover of Randgold, which runs gold mines in Africa, sometimes in tricky jurisdictions such as Mali and Cote D’Ivoire.
Sawiris told Fox: “I invest in gold mining companies because the cost per ounce has a 30 to 40 percent discount when you mine it yourself versus the international (gold) price, so there is a cushion there.”
He added: “In the last few years, there haven’t been any big findings in gold or copper anywhere in the world … I mean significant ones. That means down the road, there will be higher prices.”
He likes gold (and also copper) for other reasons — as a hedge against inflation and as a buffer in the face of current geopolitical uncertainty.
By underwriting expansion, as well as bringing in accomplished mine managers to acquired investments, such as Sebastien de Montessus, CEO and president of Endeavour, Sawiris had shown himself to be “a shrewd and accomplished operator,” said Guy at Numis.
La Mancha has beefed up its profile this year. In January Sawiris brought in Andrew Wray, the former finance director of London-listed Acacia Mining (which owns gold mines in Tanzania) to be his CEO. Sawiris has also put Wray on the board of Golden Star. And he recruited Nasr, who worked with him in the Middle East for 20 years as he built up his North Africa-Asia telecoms empire (Orascom), which was eventually sold to the Russians.


Ghosn sues Nissan and Mitsubishi for breach of contract: report

Updated 5 min 16 sec ago
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Ghosn sues Nissan and Mitsubishi for breach of contract: report

  • Ghosn is seeking up to $16.8 millions in damages
  • He spent over 100 days jailed in Japan over financial misconduct trials
PARIS: Former auto titan Carlos Ghosn, currently under house arrest in Tokyo, is suing Nissan and Mitsubishi in a Dutch court for “improper termination” of his contract, French newspaper Le Figaro reported Wednesday.
Ghosn is accusing the Japanese manufacturers of breaching his contract as an employee of NMBV, their joint subsidiary based in the Netherlands, and seeking up to $16.8 million in damages, it said.
The big-spending former chief of both Renault and its Japanese partner Nissan is awaiting trial in Japan on charges of financial misconduct.
He was kept behind bars for over 100 days before being granted bail and sacked from all his management roles.
Ghosn is accused of under-reporting millions of dollars in income at Nissan and of using company funds for personal expenses — charges he denies.
His lawyers argue that while Ghosn resigned from Renault-Nissan BV (RNBV), he had not done so from NMBV and “the breach of contract” was unwarranted, Le Figaro said.
Nissan and Mitsubishi argue that Ghosn’s contract was invalid as it would not have been submitted to NMBV’s board, according to the daily.
NMBV had thanked Ghosn after a meeting of his board of directors on March 12, the same day as the announcement of its dissolution.
Ghosn’s spokesperson and his lawyer both declined to comment when contacted by AFP.
Le Figaro said the manufacturers were seeking to recover some $8.79 million paid to Ghosn by NMBV between April and November 2018.
Renault announced in early June it was considering taking action against its former boss after it identified $12.36 million of “questionable expenses” linked to Ghosn at RNBV.
The 65-year-old Ghosn was arrested in Japan in November as he stepped off his private jet at Tokyo airport.
His dramatic downfall stunned the business world and laid bare tensions in the alliance between Renault, Nissan and their smaller Japanese partner Mitsubishi.
Ghosn has not been charged in connection with his activities at NMBV.