Chrome alloys specialist Afarak Group PLC (LON:AFRK) is to take full control of its South African mines through a buy-out of its partner in the Synergy Africa joint venture.
Afarak added the transaction will give rise to a significant accounting gain due to a revaluation of its 51% stake following the change in control. This transaction simplifies the group structure and means Synergy Africa can be fully consolidated into the accounts, said the Finnish business.
In 2018, fully consolidating Synergy Africa would have resulted in stated revenue rising by €29mln and underlying profits by €1mln.
Guy Konsbruck, chief executive, said: “We are extremely glad to have reached this agreement, as the future growth potential of AFARAK resides largely in our mining activity.
“Additionally, our niche approach to the Ferro Chrome production requires full control over our mining assets to guarantee sustainable availability of high-quality ore.”
Synergy Africa was established in 2010 when Chromex Mining Plc was acquired.
The buy-out is costing a nominal sum of US$49 and will see the joint venture's £18mln of debt restructured.