Fri, 10 Nov 2006
 
 

Pine Pienaar, CEO, Mvelaphanda Resources
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» Mvela Res upping empowerment status
» Mvela to tackle Northam call option
» Mvela sees way open for Booysendal deal
» Pressure on under-achieving Mvela
» Sexwale takes 30% of Mvela Resources
» Incwala quits R1.2bn Mvela deal

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Mvela to take another 11% in Gold Fields
Allan Seccombe
Posted: Thu, 24 Aug 2006

[miningmx.com] -- Mvelaphanda Resources wants to buy a further 11% stake in Gold Fields as it moves ahead with an empowerment transaction that is broad based and does not include the “usual suspects”, Mvela CEO Pine Pienaar said on Thursday.

Mvela is involved in a transaction to acquire a 15% stake in Gold Fields South Africa, which includes the assets that gave the parent gold company two thirds of its 4.2m oz gold output in the 2006 financial year.

In terms of the mining laws, mining companies are obliged to have transferred 26% of their equity to black economic empowerment companies by 2014.

“We have already had discussions with Gold Fields around it. We are testing what the financing method will be. It is a given we will pursue the outstanding 11%,” Pienaar told a results presentation.
we will pursue the outstanding 11%
A deeply complex financing arrangement was put in place for Mvela to acquire the option to the 15% stake in the South African assets in a R4.1bn transaction finalised in 2004. At the time Mvela was granted pre-emptive rights to another 11%.

It has the right to flip this holding up into a roughly 8%-9% stake in the parent company, Gold Fields Ltd at a ratio to be determined by the rand against the dollar and the gold price at the end of March 2009.

Mvela will by the end of March 2009 own 45m to 55m Gold Fields Ltd shares, which at today’s share price, are worth between R4.9bn and R6bn after Mvela has repaid or refinanced outstanding mezzanine debt of R1.9bn.

The government is expected to grant Gold Fields converted new-order rights before the end of this year because of their empowerment efforts, Pienaar said. “If the regulators give Gold Fields conversion, who is to question our BEE credentials.”

Mvela will conclude an empowerment deal in September that will lift the empowerment ownership of the company above 50%, clearing the way to finalise a deal with Anglo Platinum to transfer Mvela’s 50% stake in the undeveloped Booysendal platinum project to Northam Platinum.

“It is an easy way to get Booysendal accelerated,” Pienaar said.

It should take another three weeks to win shareholder approval, bringing finality to the empowerment transaction in November.

The new consortium will have to find roughly R1.3bn to take a 22% stake in Mvela at the prevailing share price.

“It will be broad based and it is not a usual suspect,” Pienaar said, adding one of the benefits of bringing in a broader base of empowerment shareholders would diminish the perception that the doyen of empowerment Tokyo Sexwale was benefiting again.

Former mines minister Phumzile Mlambo-Ngcuka hit out at empowerment deals that appeared to involve a small pool of people that had become very wealthy through these transactions. She championed the drive towards including communities and smaller businesses in empowerment deals.

Sexwale, Patrice Motsepe, Cyril Ramaphosa and Saki Macozoma are among those seen as the “usual suspects.”
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Mvela is 29% owned by empowerment company Mvelaphanda Holdings, which is led by Sexwale.

Over the past two years Anglo Platinum has been pushing for higher levels of empowerment within Mvela to ensure it can extract maxim credits for the Booysendal project.

The most likely sector for consolidation of predominantly empowerment companies is the platinum industry, Pienaar said.

“It is highly fragmented in terms of the BEE side. It is, to my mind, mature. I foresee that in the next two years there will be a lot of corporate activity, with consolidation and cooperation,” he said.

Pienaar ruled out a transaction in the coal industry despite Mvela having cast an acquisitive eye over the sector, saying the sector was not yet ripe for consolidation.