JSE-listed Insimbi Group has agreed on a share repurchase and subsidiary disposal schemes with some of its wholly-owned subsidiaries that include Amalgamated Metals Recycling, Amalgamated Metals Recycling West Rand, and Spring Lights 1135, among others.
The company sources, processes, beneficiates and recycles ferrous and non-ferrous metals, and said recently that it had been affected by the government’s decision to curb exports of ferrous and non-ferrous scrap and waste metal.
In 2016, Insimbi acquired shares in Amalgamated Metals Recycling (AMR), Amalgamated Metals Recycling SA and Amalgamated Metals Recycling West Rand with the intention of creating a larger, more diversified company which would become a more significant player in the recycling sector.
On Friday, it said that “due to the underperformance of the AMR Booysens Business and the AMR WR Business, Insimbi believes that the disposal of the business assets in terms of the AMR Booysens Disposal and AMR West Rand Disposal is in the best interest” of the company.
At the same time, Insimbi is carrying out a share repurchase scheme that it deems as an appropriate allocation of capital, with the impact of the repurchases and the cancellation and delisting of such repurchased shares expected to enhance the net asset value per Insimbi share.
“The reduction in the number of issued shares will also have the effect of increasing the holdings of the company’s existing shareholders,” the company said.
The share repurchase programme in Insimbi’s Crimson Clover subsidiary is inter-conditional with the the disposal by Amalgamated Metals Recycling and Amalgamated Recycling SA’s business assets used in connection with the scrap metal trading business.
This scheme will be used to settle the purchase consideration due in terms of the Amalgamated Metals Recycling Booysens disposal.
“The aggregate repurchase consideration, payable by Insimbi in terms of the repurchases, is R43 million which will be funded by Insimbi from its available cash resources and facilities, comprising of the aggregate repurchase consideration payable by Insimbi to the Crimson Clover shareholders, the aggregate repurchase consideration payable by Insimbi to the Casterly Rock shareholders, and the aggregate purchase consideration in terms of the AMR Booysens Disposal is R5.6m payable in cash,” noted Insimbi.
The purchase consideration in terms of the Amalgamated Metals Recycling West Rand disposal amounts to R24.3m. This brings up the sum proceeds to be received by Insimbi from the disposals to R30m.
Earlier this month, Robert Dickerson, the chairperson of Insimbi, said South Africa has made little progress in resolving key infrastructure challenges hobbling mining and industrial sectors, with these critical gaps worsening an operating framework characterised by a dip in prices for some commodities.
“The South African government allowed the ban on exports of ferrous and non-ferrous waste and scrap metal to expire in December 2023. For Insimbi, the ban primarily impacted our ferrous division,” Insimbi said earlier.
However, the company has been able to adapt and manage the new regulatory move, attributable to the diversified nature of the group.
With South Africa still facing port, rail, water and electricity bottlenecks, the company has not been spared the impact of this.
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