HARARE- Crocodile skin producer, Padenga Holdings has announced that it is in the process of acquiring an interest in a resources focused investment holding company.
After trading under caution for over 7 months, the ZSE listed company has revealed that it is in the process of acquiring a controlling 50.1% in Dallaglio, which in turn owns the Pickstone Peerless mine as well as the Eureka mine which are both located in Zimbabwe, ending months of speculation.
Dallaglio is a special purpose vehicle which is jointly owned by Vast Resources and Grayfox investments. Grayfox investments is a consortium of local investors domiciled in Zimbabwe. As at 2018, Vast controlled 25% of Dallaglio. In April Vast Resources disposed of its indirect interest in Pickstone Peerless and the disposal was to existing shareholders.
In a circular to shareholders released on Monday, Padenga’s management said value proposition stems from the need to diversify its portfolio from a high concentration in crocodile skin production to mining.
“Padenga has a high concentration risk with 79% of sales in 2018 being ultimately to one goods brand in Europe. Product and customer concentration risk is worsened by the nature of Padenga’s core product” read the circular.
In recent years there has been an increased compliance requirements in the crocodile skin sector. Generational changes in end product consumers has placed greater emphasis on social licence compliance. This has necessitated material changes to operational and production systems.
Padenga believes the pressure to consistently verify credible and ethical operational procedures will likely continue into the future, in turn, heightening risk and necessitating diversification.
The Pickstone Peerles mine was acquired by Dallaglio in 2014 while the latter was acquired in 2018.
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