Gem of a deal for Wiese

24 August 2016 - 08:35 By Bloomberg

Christo Wiese, South Africa's richest man, recently ventured into diamonds and, after buying a stake in Trans Hex, a Cape Town-based miner of the precious stones, said he saw opportunities to consolidate diamond operations in the region. The billionaire, 74, said he had always been "fascinated" by diamonds and saw good value in his latest acquisition."There are opportunities for consolidating diamond operations in Southern Africa," he said."Obviously we will look at growing the business as much as we can."Two companies backed by Wiese's family bought a 47% stake in the gem producer and planned to form a group with 25% shareholder RECM&Calibre, according to Piet Viljoen, a director of the asset manager.Trans Hex's market value is R414-million.It has been a difficult 12 months for diamond producers after prices fell 18% last year - the most since the financial crisis of 2008 - as Chinese demand slowed and an industry-wide credit crunch hit buyers who cut, polish and manufacture the stones.That price fall has created openings for investors such as Wiese, who are willing to take a punt on luxury gems.While Wiese is best known for his retail successes including clothing chain Pepkor, which was sold to Steinhoff International for R62.8-billion in 2014, Trans Hex is not his first foray into diamond mining. He was once a co-owner of a South African alluvial diamond mining operation in the 1970s.Weise is personally worth $7.6-billion, according to the international Bloomberg Billionaires index.Diamonds are "wonderful things, things of beauty and of everlasting value," Wiese said. "It's just a very exciting business."Trans Hex rose 4.3% to R3.90 a share in early trade on the JSE yesterday. The stock has gained 42% this year. ..

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