Gemfields Group Limited (AIM:GEM) decision to sell the Fabergé brand for $50 million is “a good outcome”, that’s according to analysts at stockbroker Panmure Liberum.
The deal, announced on Monday morning, frees up capital and supports the core business as Gemfields finishes its expansion of the Montepuez ruby mine (MRM) in Mozambique, and the Kagem mine in Zambia.
Panmure Liberum repeated a ‘Buy’ rating, with an upgrade price target of 15p.
“Fabergé has helped GEM raise the profile of the coloured gemstones it mines, and in its words, ‘we will certainly miss its marketing leverage’. However, GEM can now fully focus on mining and the sale further strengthens its balance sheet as it finalises the PP2 expansion at a time when demand and pricing for fine-quality rubies remain strong,” analyst Duncan Hay said in a note.
The deal
Gemfields this morning agreed to sell its wholly owned unit, Fabergé Limited, to SMG Capital LLC, in a deal worth $50 million.
Some $45 million is due on completion, expected on 28 August 2025, with a further $5 million to be paid through quarterly royalties (equal to 8% of Fabergé’s revenue).
Gemfields chief executive Sean Gilbertson added: “Having initiated our strategic review of Fabergé in response to the considerable challenges Gemfields started facing in Q4 2024, today's sale marks the end of an era for us.
“Fabergé has played a key role in raising the profile of the coloured gemstones mined by Gemfields and we will certainly miss its marketing leverage and star power.
Gilbertson added: “Brands as iconic and beautiful as Fabergé do not change hands very often and we wish the team and Mr Mosunov every success as they perpetuate the unrivalled legacy of Fabergé."
In London, Gemfields shares were up just over 4% changing hands at 5.95p.