One Of South Africa’s Leading Infrastructure Development Companies Raubex Details Plans Of Acquiring Bauba
One Of South Africa’s Leading Infrastructure Development Companies Raubex Details Plans Of Acquiring Bauba. Raubex, one of South Africa’s leading infrastructure development and construction companies has announced its intention of acquiring Bauba, a diversified mining and exploration company that is listed on the Johannesburg Stock Exchange (JSE) since September 2010.
As a result of, inter alia, the ongoing volatility in the mining sector (including weak chrome ore pricing, and increased production costs), significant increases in local and international freight costs and other continuing effects of the Covid-19 pandemic, Bauba and its subsidiaries (the ‘Group’) recorded a total comprehensive loss for the eight-month period ended 28 February 2022 of R52,3 million.
Further risks remain of potential reduced global demand for chrome ore and concentrates due to production capacity constraints in the People’s Republic of China and the uncertainty posed by potential additional Covid-19 waves, despite the availability of vaccines, and record freight costs. If the chrome ore prices drop below end June 2021 levels for an extended period, or if the Rand/US dollar exchange rate strengthens significantly, it could cause material uncertainty for the Group to meet its obligations as they fall due and may require further external funding support.
In this context, the board of directors of Bauba has resolved that Bauba can no longer justify the costs and associated administrative burden of a JSE listing relative to the benefit of an ongoing listing, including the doubtful prospects of a junior counter raising public capital in the sector in which Bauba operates. Without the assistance of a major investor such as Raubex to support ongoing funding requirements, no finance is currently available to the Group in the public market and the Group will be better placed to secure funding support for its operations in an unlisted environment.
