Overview
Our clients were concerned that their IPO would not be successful and that they would not achieve a fair share price owing to the decline in chrome ore prices. Core Consultants was therefore asked to conduct an independent market analysis on the chrome ore industry and provide an outlook for chrome ore prices.
Methodology
Core Consultants used its proprietary chrome industry database as well as interviewed each South African chrome mine in order to establish the average production costs of the industry. In this way Core Consultants was able to determine the minimum required chrome ore price for the market to remain in balance.
Our Recommendation
The minimum chrome ore price required in South Africa was higher than current prices. We therefore provided an independent forecasts that chrome ore prices should improve over the medium term and presented these findings to investors.
Outcome
The company delayed its listing date and eventually issued a bond which was fully subscribed. In addition, the company received interest from five different investors wishing to take significant positions in the company. The Core Consultants report is used to educate interested investors and fund managers about the chrome market.
