Gemfields Sells Iconic Faberge to Raise Working Capital
August 14, 25
(IDEX Online) - Loss-making Gemfields is selling the iconic Faberge brand for $50m to reduce mounting debts and raise working capital for expansion projects.
It has agreed a sale to SMG Capital LLC, the investment company based in Houston, Texas, USA.
Gemfields, the world's biggest colored gemstone miner, bought Faberge in 2013 from one of its own shareholders in all-share deal that valued the company at the time at $142m, almost three times what it's now being sold for.
Faberge was founded in 1842 in St Petersburg, Russia, by Gustav Faberge and is known globally for its intricately crafted and highly prized Easter eggs.
Gemfields said late last December that it was planning to sell Faberge as part of a strategic review.
In a statement published on Monday (11 August) it 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 sale is expected to conclude on 28 August. The buyer will pay $45m on completion, with the remaining $5m payable by quarterly royalty payments at a rate of 8% of Faberge's revenue.
Gemfields is close to completing a $70m second processing plant at its Montepuez ruby mine, in Mozambique, that will treble its capacity, and is expanding its emerald mining operations at Kagem, in Zambia.
In April, it reported a $100.8m loss for 2024 - and announced a $30m rights issue to help secure its future.
In the first half of this year revenue from ruby and emerald auctions halved from $121m to $60m as the company faced operational disruptions, production shortfalls in high-quality stones, and challenging market conditions.
Pic of the $1.2m Malaika egg (the word for "angel" in Swahili) in July 2024, courtesy Faberge.