This is how the world’s warmongers do it – create a ‘war-torn’ scenario, then steal the resources.
SMALL CAP FOCUS: Fox Marble is first company listed on London market to operate exclusively in Kosovo
Following its recent AIM listing, Fox Marble will be the first company operating exclusively in Kosovo listed on the London market.
Symbolic as this is for a country emerging from conflict and reconstruction, there is much more to the business than mere tokenism.
For the group, headed by serial entrepreneur Christopher Gilbert, possesses the means to turn its pre-IPO promise into cash flow, profits and perhaps even dividends in a very, very short space of time.
This of course would set it apart from the vast majority of jam-tomorrow stocks that clog the arteries of the junior market.
Fox owns the rights to five quarries in three locations in the formerly war-torn Balkan state estimated to contain 300 million cubic metres of marble.
This includes high-quality material such as honey yellow onyx, and other rarities too, such as an unblemished black marble, which is highly sought after in the US.
In short these quarries, last excavated in the Tito era, contain an incredibly valuable bounty.
Fox holds 25-year mining licences over the sites with the option to extend.
The plan is to plough much of the £9.65 million raised as part of the AIM float into acquiring the equipment required to extract the blocks of marble and creating a cutting and polishing plant.
The plant isn’t scheduled to be up and running until ten months after the float, so in the meantime valuable cash flow will be generated selling unprocessed blocks.
The company’s prospectus provides a hint of the potential of the company’s five quarries and draws heavily on the work of Paolo Giovannangeli for USAID back in 2005.
The company has further obtained a completed a maiden JORC resource indicating an in-situ valuation of approximately 16.5 billion euros.
Cut and polished into slabs, an eight cubic metre block could be worth anywhere between 9-24,000 euros, based on a price per square metre price of between 40 and 100 euros, a back of the envelope calculation reveals.
It underlines just why Fox wants to build a facility to process the raw blocks and hints at a very high-margin business.
The company’s lead broker Fox-Davies (an amusing coincidence; they are simply broker and client) is predicting the business will generate gross revenues of 30 million euros and earnings before interest and tax of 24 million euros in the first full year of production.
You might think marble is something of a niche market. But with a value of around US$18 billion a year it is anything but.
It is, however, highly fragmented and its leading players are with only two exceptions (Fox and Hong Kong-listed China Kingstone) private companies that tend to shun the corporate limelight.
The People’s Republic is by far the biggest importer of raw marble with 54 per cent of global trade, and the US is the major consumer of the finished stone.
Kosovo’s rather troubled recent history may raise a red flag with investors.
However this assessment is based on an outdated perception of the tiny country, says CEO Gilbert, who is an ardent advocate of its potential.
Indeed the float is a way of showing that Kosovo is open for business, he adds.
The former music company boss explains: ‘Kosovo has had a horrendous press because of the horrific nature of the conflict that took place in the 1990s. However Kosovo is a can’t-fail project for Europe
‘It is heavily monitored and supervised; it is a stable, democratic republic and having been there many times I have seen more guns in Los Angeles than I have in Kosovo. It is a very safe and stable place.
‘We have had endless support. We applied for the [mining] licences. We were heavily supported through the process and got them in double quick time.
‘The local mayors in municipalities have been endlessly supportive because of the jobs [Fox will create] as has the central government, which recognises the cachet that a British PLC will bring to the country.
‘We are at the vanguard of international investment in Kosovo.’
September 3, 2012 – 2:47 am
Bloomberg By Carol Matlack on August 30, 2012
Kosovo is preparing to sell a majority stake in its state-owned post and telecom company PTK, a deal that could yield as much as €600 million ($753 million) for Europe’s newest and poorest country.
The bidding, set to begin next month, has attracted interest from European and Turkish phone operators, as well as from an investment company headed by former U.S. Secretary of State Madeleine Albright, who was a major backer of Kosovo in its war against Serbia. Already, however, the sale process has been clouded by corruption allegations, legal challenges, and the death of the state privatization agency’s chief, Dino Asanaj. In June, his body was found in his apartment in Kosovo’s capital city of Pristina, with 11 stab wounds. Authorities say he committed suicide.
Kosovo, which declared independence in 2008, is an economic basket case. National unemployment stands near 45 percent, and per capita income hovers around $7,000, the lowest in Europe. The International Monetary Fund this year approved a $134 million bailout for the country and urged its government to raise more money by selling a stake in profitable PTK. “We expect big impacts on the economy and the telecommunication sector on the one hand, and at the same time we want to signal foreign investors that Kosovo is an attractive country to invest and do business [in],” Economy Minister Besim Beqaj says.
The government has tried, and failed, to privatize PTK before. An attempt launched in 2010 fell apart last year following a corruption investigation at the company. And earlier asset sales were tainted by accusations of wrongdoing: At the time of his death, privatization chief Asanaj faced investigation for allegedly demanding a bribe from purchasers of a privatized hotel property.
Kosovo authorities have said the stress of investigation led Asanaj to kill himself. That finding is “unbelievable,” says William Bartlett, a senior researcher at the London School of Economics who has advised the European Commission and international organizations in Kosovo. “Kosovo is a lawless place,” Bartlett says.
Serbia is contesting the PTK privatization, arguing that former Serbian employees of the company have a legal claim on its assets. On Aug. 23, Serbia announced it would file lawsuits before international courts to block investors from buying stakes in the company. “As in any asset sale, rights of former and current employees also must be respected,” including claims by Serbs who fled Kosovo during the war that began in 1999, says Aleksandar Vulin, the head of Serbia’s agency for Kosovo affairs. “The move should serve as a warning to foreign investors who want to acquire assets there.”
Despite the controversy, Kosovo’s government announced on Aug. 18 that it had approved five groups as potential bidders on the PTK stake. They include a consortium of Portugal Telecom and Albright Capital Management, a Washington (D.C.) investment firm started by the former secretary of state who urged NATO action against Serbian troops during the Kosovo conflict. Nelson Oliveira, Albright Capital’s general counsel, says the group plans to “review due diligence materials and possibly prepare a bid” but declined further comment. Consortia that include British Telecom Poland and Turkish mobile operator Turkcell have also been approved as potential bidders.
With reporting by Bekim Greicevci in Pristina and Misha Savic and Boris Cerni in Belgrade.
Matlack is a Paris correspondent for Bloomberg Businessweek.
BELGRADE — Some 3,000 Serb students in four enclaves south of the Ibar River did not start school on Monday, after the premises were disconnected from the water supply.
Serbian Education Ministry official Dušan Maksimović told reporters that the affected schools are located in Laplje Selo, Gračanica, Sušica, and Preoc.
Maksimović told the Beta news agency that classes would not be held out of fear that an epidemic might break out.
“The schools will not open until water has been reconnected. I have informed the Serbian Government Office for Kosovo and Metohija about this,” he explained.
The Kosovo Albanian authorities in Priština told the agency earlier that they decided to cut the water supply to the educational institutions due to “unpaid bills”.
However, Maksimović dismissed this explanation, saying that the move represented “new pressure by the Kosovo authorities” aimed against Serb schools which work according to the Serbian curriculum, and added that the schools in question had not been sent the bills on time.
- Julia Gorin: Murder and Corruption in Kosovo? You Don’t Say! It Still Won’t Keep Maddie Albright from Getting her War-begotten Goodies
- Kosovo’s PTK privatization: with a little help from old friends