Gemfields sells Fabergé for $50m to focus on rubies and emeralds
Gemfields Group announced the sale of the fine jewellery and ornaments brand to SMG Capital, an American investment firm owned by a tech entrepreneur, with $45 million payable upfront and a further payment due through quarterly royalties.
Gemfields is an Aim-listed miner of coloured gemstones. The Fabergé brand has been part of the group for 18 years and it sells fine jewellery as well as the world-renowned Fabergé eggs, which are priced at between £58,080 and £175,680.
The original collection of bespoke Easter eggs made for the Russian imperial family by the House of Fabergé sell for many millions. They were produced between 1885 and 1916 by the company run by Peter Carl Fabergé. The most expensive egg was an Easter gift from Emperor Alexander III to Empress Marie Feodorovna in 1887 and was valued at $33 million in a sale to a private collector.
Analysts at Panmure Liberum said the sale was a 'good outcome' for Gemfields as it would free up capital for the expansion of its mining operations and strengthen the group's balance sheet. Shares in Gemfields rose 0.18p, or 3.1 per cent, to 5.88p.
Sean Gilbertson, group chief executive of Gemfields, said that the company's gemstones had benefited from the ownership of Fabergé and that the group would miss the 'marketing leverage and star power' of the luxury brand.
Sergei Mosunov, chief executive and owner of SMG Capital, said: 'It is a great honour for me to become the custodian of such an outstanding and globally recognised brand. Fabergé's unique heritage, with ties to Russia, England, France and the USA, opens significant opportunities for further strengthening its position in the global luxury market and expanding its international presence.'
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Gemfields sold the jewellery brand after conducting a strategic review and will use the sale proceeds as working capital while it sets up a new processing facility at its ruby mine in Mozambique.
In a stock market statement to investors, Gemfields said: 'With the sale of Fabergé and the discontinuance of other non-core projects, Gemfields is now a more streamlined and focused investment proposition with a strengthened balance sheet.'
The group has a primary listing on the Johannesburg Stock Exchange and operates the Kagem emerald mine in Zambia and the Montepuez ruby mine in Mozambique. Gemfieds generated $117.2 million from its ruby mine last year and revenues of $78.7 million from its Zambian mine. The Fabergé brand generated sales of $13.4 million.
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