Gemfields is seeking shareholder approval to issue 556.2 million new shares to raise about $ 30 million through a fully committed and underwritten rights issue.
It said the proposed rights issue, which is subject to shareholder approval, will be undertaken to address a near-term working capital shortfall as a result of the cumulative impact of several challenges the company encountered in the second half of 2024 and the first quarter of 2025.
It said the proceeds of the proposed rights issue will also be used for general corporate purposes.
Gemfields said in a trading statement that the proposed rights issue shall be fully underwritten by its two largest shareholders, Assore International Holdings (AIH) and Rational Expectations.
Once shareholder approval is obtained at an extraordinary general meeting (EGM), Gemfields will launch the proposed rights issue, which will be offered at a UK issue price of 4.22p per new share and a South African issue price of R1.07 per new share, on 10 new shares for every 21 existing shares basis and will be available to all qualifying shareholders.
Each Underwriter has entered into an individual pre-funding agreement with Gemfields, under which AIH and Rational shall make a loan for $8,74 million and $ 4.65 million, respectively, subject to the publication of the EGM circular.
Meanwhile, Gemfields recorded revenue of $ 213 million for the year ended December 31, 2024, compared to $ 262 million a year earlier.
The decline in revenue was attributed to a disrupted market for emeralds in the second half of last year.
Mathew Nyaungwa, Editor-In-Chief, Rough & Polished
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