Sipho Pityana, executive chairman of Izingwe Holdings
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Izingwe seeks role in AngloGold unbundling
Allan Seccombe
Posted: Mon, 02 Oct 2006

[miningmx.com] -- SIPHO Pityana, chairman of Izingwe, will to talk to Anglo American about the sale of the mining conglomerate’s 41.8% stake in AngloGold Ashanti, with a view to either buying shares or partnering with someone who would.

Izingwe was named on October 2 as the empowerment company that will take a 0.5% stake in AngloGold Ashanti as part of the world’s number two gold producer’s drive to meet its commitments to the government to secure new order mining rights.

“We’d be interested in participating beyond where we are. This is the kind of space we want to be in,” Pityana told Miningmx.

Pityana is to take a seat on the AngloGold Ashanti board once Izingwe buys 1.4 million AngloGold Ashanti shares currently worth R409m. The transaction, which will be funded through dividend flow, should be implemented before the end of 2006.
we're going to talk to them
Anglo, which held 51% of AngloGold Ashanti, said in October last year it was stepping out of non-core businesses, one of which is gold. It trimmed its stake to 41.8% earlier this year.

The two-year-old Izingwe has not yet spoken to Anglo directly, but it has made its intentions known through AngloGold Ashanti management, Pityana said. Asked if Izingwe would talk to Anglo now the AngloGold Ashanti deal has been largely settled, he said: “Absolutely. It would make sense.”

He was sure Anglo was receiving expressions of interest from a number of parties. “It is our view, given that, we’d want to know who those parties are and we’re going to talk to them,” he said.

There has been speculation how Anglo will dispose of that stake. Greg Potter, an equity trader with Nedcor Securities, said he favoured Gold Fields above AngloGold Ashanti because of the share overhang issue.

AngloGold Ashanti CEO Bobby Godsell said in July there are three ways Anglo can reduce its stake. He favoured the least disruptive route of a dividend in specie whereby Anglo shareholders receive a proportional number of the gold miners’ shares.

There could also be a share placement, which would put 115 million shares on to the market, which could drag down AngloGold Ashanti’s share price. The other way would be through merger and acquisition activity, which would dilute the Anglo holding, or Anglo might swap its stake for another asset.

“Between Izingwe and the workers we will be debating whether we shouldn’t be taking advantage of this window of opportunity,” Pityana said.
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“The decision will lie with the new buyers. They might want to partner with us or wait for a period. But, we’ll be sitting on the side, saying this might be the opportunity of doing it immediately,” he added.

Izingwe will be close with the unions, being their representative on the AngloGold Ashanti board.

Pityana vigorously defended his role in the empowerment transaction as a former senior government employee. He was the director general of foreign affairs four years ago.

“I think it would not be fair to be put into the same category as someone who has parachuted out of government into a transaction they may have been working on during their time doing their public duty,” he said.

“My ambition was never to work for government for life. I don’t think it helps to hound people who have been in government,” he said.

Izingwe has a number of mineral prospects in South Africa and Africa, ranging from gold and platinum to diamonds, he said.

“A lot of these derive from the relationships developed during my time as director general of foreign affairs, from networks and contacts I’ve had on the continent,” he said.

“There are good prospects on the continent, but you need institutional capacity to assess them meaningfully and intelligently. That’s what this partnership with AngloGold Ashanti does,” he said.