SYDNEY (Reuters) - Shares in Global Mining Investments GMI.AX, an Australian fund managed by U.S. money manager BlackRock Inc (BLK.N), climbed 12 percent on Thursday after saying it intends to delist and restructure as a trust.
The delisting, which requires shareholder approval, gives GMI investors an opportunity to continue with their investment in global mining and metal stocks under BlackRock or exit at a price that reflects the underlying net asset value, once the restructuring is complete, GMI said.
It said its board has been concerned for sometime about what it saw as GMI’s share price discount to net tangible assets.
“This discount has persisted despite consistent out performance of GMI’s investment portfolio relative to its benchmark and the various initiatives taken over the past four years to close the discount gap,” it said.
GMI’s investments range across a number of global and smaller-capped mining companies.
As of March 31, its top four investments were in Rio Tinto (RIO.AX) (RIO.L), Glencore (GLEN.L), BHP Billiton (BHP.AX) BLT.L and Vale VALE5.SA. The fund has a market cap of A$187.4 million ($188.09 million).
Under the plan, GMI would transfer its portfolio of investments to an unlisted investment scheme named Global Mining Investments Trust. GMI would be delisted and wound up, most likely following a shareholder vote at the company’s annual general meeting in October, it said.
GMI stock, in near-steady decline since February, was up 12 percent to A$1.03 at 0130 GMT against a mostly flat wider market .
($1 = 0.9963 Australian dollars)
Reporting by James Regan; Editing by Matt Driskill