Uncertain outlook could reap rewards
WITH four recent departures and a rumoured fifth in the works, the board of ENRC is looking anything but steady. Already trading at a discount after buying disputed mining rights in the Congo last year, its shares plummeted by more than seven per cent on Friday in the wake of the shareholder vote.
With a free float of just 20 per cent, taking the company private again might be attractive to its Kazakh founders, who control more than 40 per cent of the company. If that happens, they’re likely to have to pay a premium, and though prices have fallen they’re still above ENRC’s historic low.
And if ENRC proves itself ready to step up to UK standards, then sentiment could quickly change, also driving prices up.
With shares likely to continue falling in the short term at least, a bet on ENRC is certainly a gamble, but one that could ultimately pay off. Risks often do.