South Africa's Exxaro Shares Debut at 58.50 Rand

Posted 27 November 2006 @ 09:55 am EET     Print     Reprint     E-Mail     Comments

JOHANNESBURG (Reuters) - Shares in South Africa's Exxaro Resources, the country's biggest black-owned mining group, made their market debut at 58.50 rand on Monday as investors sought to place a value on the stock.

The coal, base metals and heavy minerals producer Exxaro emerged after the split of diversified miner Kumba Resources, and merger with unlisted Eyesizwe Coal as a major shareholder.

The shares traded at 57.90 rand by 0720 GMT, versus a largely flat blue chip Top-40 index. This was up 0.56 percent from the close of 57.58 rand on Friday, when they were still trading as Kumba Resources.

Black-owned Eyesizwe heads a consortium of black groups that will own 55 percent of Exxaro, helping it meet South African government demands to open up the economy to blacks.

Exxaro has an estimated enterprise value of 16 billion rand.

Shares in Kumba Iron Ore, the other firm to emerge from the split of Kumba Resources, started trading a week ago and were unchanged at 115.55 rand.

Former Kumba Resources Chief Executive Officer Con Fauconnier, will lead Exxaro for one year, and then hand over to Sipho Nkosi, former CEO of Eyesizwe Coal, completing South Africa's biggest black empowerment deal.

Exxaro will also have an exposure to iron ore, with a 20 percent stake in a Sishen Iron Ore Company, which is majority owned by Kumba Iron Ore.

Kumba Iron Ore, Africa's biggest iron ore producer, is the JSE Securities Exchange's first pure iron player, and exports the bulk of its commodity to steel mills in China and Europe.