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Gemfields Group Ltd said on Friday it will ask its shareholders next month to approve the planned equity rights issue. The London-based miner and marketer of coloured gemstones intends to raise about $30 million through the rights issue by offering 556.2 million new shares. Shareholders will vote at an extraordinary general meeting on May 19. Gemfields expects the proposed rights issue to open on May 29 and close on June 12. The rights issue aims to address a near-term working capital shortfall. Earlier, the company said the proposed rights issue will be fully underwritten by its two largest shareholders, Assore International Holdings Ltd and Rational Expectations (Pty) Ltd. Should shareholders approve, the company will offer 10 new shares for every 21 existing shares held at 4.22 pence and R 1.06860 per new share. In London Friday, Gemfields shares were down 15% to 5.00 pence, while they were down 13% to R 1.30 in Johannesburg. Assore and Rational Expectations also have entered into pre-funding agreements to make loans to Gemfields equivalent to their pro-rata entitlement in the proposed rights issue amounting to $8.7 million and $4.6 million. The loans will provide the company with an immediate working capital injection, pending the completion of the proposed rights issue, it said. On Friday, Gemfields reported it had suffered pretax loss of $103.6 million in 2024, swung from a profit of $16.6 million in 2023. Revenue for the year was $212.9 million in 2024, down 19% from $262.0 million. Gemfields booked impairment charges of $91.3 million in 2024, compared to none a year before. Selling, general and administrative expenses rose 13% to $63.9 million from $56.5 million. Finance costs more than doubled to $6.6 million from $3.0 million. Gemfields skipped paying dividends for 2024 after paying out 0.857 US cents for 2023. Loss per share widened to 7.0 US cents in 2024 from 0.8 cents in 2023, while headline loss per share was 2.1 cents, worse than 0.9 cents. Gemfields Chair Bruce Cleaver said 2024 proved to be a challenging year for gemstone producers. The company made ‘significant’ capital expenditure in mid-2023 at both of its key mining assets, Cleaver said. It has subsequently faced higher costs and reduced revenues, necessitating extensive cost-cutting measures at the year-end in 2024. Production fell below expectations, particularly for the highest grade and price-robust gemstones, while costs rose as mining inflation hit the price of its key input, fuel, the chair said. Political uncertainty introduced volatility at an operational level and had carried into 2025, he said. The Zambia government reintroduced a 15% export duty on precious gemstones in January 2025, which was subsequently reversed a month later, and civil unrest in Mozambique went on until mid-January 2025 from October 2024. Gemfields also said on Friday it will pause assessing strategic options for its luxury brand Faberge and will only recommence after completing the proposed rights issue. It said in December last year it was assessing strategic options with respect to Faberge and had received a number of non-binding offers. But the group said it does not believe these offers are sufficiently sound alternatives. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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