How gold deals set up Sh2.1bn plan to list Mayflower at NSE
Early this year Migori gold mines went up for sale for Kes 742 million exchanging hands between two British companies.
Mayflower Gold was buying the Kilimapesa Gold pits in Migori from London-listed firm Goldplat, gaining an entry into the Kenyan market.
However, behind the scenes, Mayflower was executing a complex deal in which it will be acquired by another London-listed company, Papillon Holdings, where they will buy 100 per cent of the new Migori miner in a reverse takeover deal.
A reverse takeover is where the target is larger than the bidder with the result that the target shareholders become majority shareholders in the bidder, hence Mayflower will have greater stake.
The merged firms will also buy a 70 per cent stake in a joint venture interest in Congo Gold SARL for interests in the Kakamoeka gold project.
After stacking the gold bars of this transactions, Mayflower has announced it will cross list in Kenya’s Nairobi Securities Exchange (NSE) giving Kenyans a chance to own a stake in the gold company.
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Mayflower announced during President Uhuru Kenyatta’s three day London tour the dual listing worth Kes 2.1 billion, making it a big player to come to market.
Mayflower’s listing would give the NSE much needed boost in attracting initial public offerings which have fizzled out since solid corporations such as KenGen and Safaricom came to the market.
Since the NSE itself listed through an IPO five years ago the bourse has only welcomed listings by the introduction of a few small firms, Bank of Kigali cross listing, a real estate investment trust (REIT) and an exchange-traded fund (ETF) whose uptake has been dismal.
On the contrary, the NSE has lost Nairobi Business Venture, National Bank, Kenol Kobil, Marshals East Africa, Atlas, African Lakes Corporation (Africa Online) and Unilever.
The market has also seen a collapse of the corporate bond market with only five issuers left.
Mayflower will be the third company to cross list in Nairobi and London following the footsteps of Atlas Development & Support Services and Kakuzi.
Atlas cross listed in 2014 but has since left the bourse leaving Kakuzi as the only firm at the NSE and the London Stock Exchange.
