White Nile founder plans another AIM flotation

Click to follow
The Independent Online

Southern African Coal, which owns coal mines in Mozambique, is expected to be valued at around £12m when it debuts on the Alternative Investment Market in January. The shares are being placed with hedge funds and other institutional investors by Hichens Harrison, the stockbroker.

Mr Edmonds and his business partner Andrew Groves are thought to be recruiting experts from the coal industry to run SAC after flotation.

Investors are believed to be hungry for SAC shares, despite the controversy surrounding the flotation of White Nile. The company's shares shot up 1,285 per cent in the first five days of trading, leading to concerns about whether there was an orderly market.

The highly regarded resources investor Artemis and hedge fund RAB Capital are both key backers of White Nile, and are thought to have taken stakes in SAC. SAC's mining assets have been assembled thanks to Mr Groves' extensive network of contacts across Africa. He was born and educated in Zimbabwe and has been involved in the operation of a string of private natural resources companies. SAC is the sixth venture to be floated on AIM with Mr Edmonds.

The controversies surrounding White Nile ensure SAC will be closely examined by the London Stock Exchange, which regulates AIM. It had to step in to suspend trading of White Nile shares on two occasions earlier this year.

Officials became worried about sharp movements in the shares, believing that it had become impossible for market makers to conduct an orderly market.

White Nile has a deal with the new government of Southern Sudan allowing it to explore an area of 65,000 square kilometres. However, the French oil group Total claims it owns the sites earmarked by White Nile, which floated at 10p as a cash shell and then raised £7m at 100p a share to fund exploration in June. Two months later, White Nile's claim was thrown into further doubt by the death in a helicopter crash of Dr John Garang, Southern Sudan's president.