JOHANNESBURG (miningweekly.com) – Black economic-empowerment mineral development and exploration company Sephaku Holdings, which is developing a cement project in the North West province, on Friday listed on the JSE main board.

CEO Neil Crafford-Lazarus said at the listing function at the JSE, that the company had listed 155-million shares, which began trading on Friday under the symbol ‘SEP’.

Sephaku Holdings, through its subsidiary Sephaku Cement, is the first new entrant in the South African cement industry since 1934. It is developing a 2,2-million ton a year cement plant in a joint venture with Nigeria’s Dangote Cement.

Crafford-Lazarus acknowledged that the timing of the listing could be seen as “strange”, considering the current economic climate, the company was running against a deadline, which necessitated the listing.

During 2008, a single sponsor indicated an interest in developing and funding Sephaku’s cement project, in exchange for a shareholding in the project. To accomplish this, Sephaku assimilated its minority shareholders in the cement project, into the larger Sephaku Holdings, and exchanged their cement shares for holding shares.

“That of course triggered a taxable event, if they didn’t receive listed shares or if the company was not listed within a year. Now that deadline runs out at August 25. So the main reason why we are here today is to comply with the undertaking that we had to the minority shareholders,” Crafford-Lazarus stated.

He added that the company was not expecting to trade significantly high values at the moment, however, once the funding for the cement project has been finalised, Crafford-Lazarus expected more certainty around the pricing of the shares and an improvement in trade.

Sephaku became the sixth company to list on the JSE this year. JSE manager for business development marketing and business development Lauren Czepek said that the bourse had 23 listings in 2008.

She said in an interview that of the six companies listed during 2009, one had listed on the Alternative Stock Exchange, with another one listing on the newly created African Board. The remaining companies had listed on the Main Board.

Czepek noted that it was difficult to predict the number of companies yet to list, as listings often depended on market movement. She added that companies more likely to list during the economic downturn would likely not do so to raise capital, but rather to raise their profiles.

“But again, it is a catch 22 situation, especially when their competitors and peers listed some time back with a higher price earnings (PEs), they are loath to come to market at a lower PE.”

Companies listing during this time were also likely to experience lower price PEs than their counterparts, which listed during 2007 or 2008.

Despite the low number of listings currently taking place, Czepek said that there were some improvements taking place in the market. “I think we are seeing some recovery already. These things take time to correct themselves.”

Sephaku is a mining exploration company, which was started in 2005. During this period, the Mineral and Petroleum Resources Development Act came into effect, and the ‘use-it-or-lose-it’ principal applied to all participants in the mining industry.

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