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Jewellery company Rajesh Exports has acquired Switzerland-based gold refining company Valcambi SA for ₹2,500 crore ($400 million) from US-based mining company Newmont Mining Corporation.
The Bengaluru-based company plans to fund 65 per cent of the acquisition cost through internal accruals and has tied up with Credit Suisse for a $140-million (about ₹880-crore) loan. The refiner has an assured supply of ore from Newmont for five years with an option to extend this further.
Valcambi has the capacity to refine 1,600 tonnes of gold and 400 tonnes of other precious metals. Last year, it processed 945 tonnes of gold and 325 tonnes of silver to generate $38 billion (₹2.36 lakh crore) of revenue, with an Ebitda of $33 million (₹205 crore).
Earnings boost Rajesh Mehta, Chairman of Rajesh Exports, said the deal would start showing a positive impact on earnings right from the first year as the company would not only get to source gold at a discount but also benefit from the consistent policy of the debt-free Valcambi to distribute 40 per cent of profit as dividend.
“The recent fall in gold prices did not play any role in the valuation of Valcambi as it does not hold any gold as inventory. In fact, the fall in gold prices is a positive for Valcambi as it would generate more sales volumes and thus will be able to produce more gold,” he said.
Tapping expertise With Valcambi’s expertise, Rajesh Exports plans to upgrade its 200-tonne gold refining capacity at Rudrapur in Uttarakhand and get London Bullion Market Association accreditation.
The Swiss company’s gold, silver, platinum and palladium bars are accepted for delivery on leading commodity exchanges, including the Chicago Mercantile Exchange, New York Mercantile Exchange and Tokyo Commodity Exchange.
Michael Mesaric, CEO of Valcambi, said the company has many innovative products, including Green Gold, which ensures that gold is produced with a green certification, using ore from mines that follow ethical mining practices.
“We produce gold bars from 0.5 grams to 1,000 grams and have several trademarks registered, in 51 countries,” he said.
Shares of Rajesh Exports closed at ₹540.10, up 2 per cent on the BSE.
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