South African fund management firm RAC has increased its stake in diamond company Trans Hex to 24.99 percent in a bid to safeguard its interests ahead of the R60 million ($5.3 million) acquisition of Namaqualand Mines (NM) from De Beers.
RAC, a joint venture between RECM and Calibre paid R93.7 million ($8.3 million) to boost its shares in the company, which mines diamonds in Angola and South Africa, Miningmx reports.
The company previously owned just under 15 percent of Trans Hex.
"RAC and Trans Hex are partners on the possible Namaqualand Mines transaction," said RAC in a statement.
"Given RAC's significant commitment to this transaction, it was deemed strategically important to increase the company's stake in Trans Hex to more than 20 percent," it said.
Trans Hex reported In June that its 40 percent owned subsidiary, Emerald Panther Investments Limited (EPI) has signed a sale agreement amendment with De Beers Consolidated Mines (DBCM) to acquire DBCM's Namaqualand mines.
The amendment provides for the creation of a special purpose vehicle, which will house the state's 20 percent interest in the project and in EPI, Rapaport reports.
Once the sale agreement is completed, Trans Hex will own a combined 60 percent stake in the project with the state. Asset management companies, RECM and Calibre Limited, will own a 27.2 percent stake in EPI, Dinoka Investment Holdings will own an 8.8 percent stake while the Namaqualand Diamond Fund Trust (NDFT), which represents the interests of various communities in Namaqualand region, will hold a 4 percent stake.
De Beers Consolidated Mines (DBCM) initially agreed to sell its Namaqualand Mines to Trans Hex in a transaction valued at $21.2 million (ZAR 225 million) in May 2011. The deal has since been delayed subject to the fulfillment of a number of conditions.
MiningMx reports that a R189 million ($17 million) loan had been secured through the Industrial Development Corporation (IDC) for the initial capital and operating costs of the currently mothballed NM.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
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