Send this article to a friend
Print this page

» JSE:ANGLO AMERICAN PLC:
20705c 0%

Anglo spends R2bn following AngloGold rights
Allan Seccombe
Posted: Thu, 26 Jun 2008

[miningmx.com] -- ANGLO American is following its rights to purchase R2bn worth of AngloGold Ashanti shares in that company’s rights issue intended to fund a sharp reduction in its hedge book. The issue has been heavily oversubscribed in the United States.

Anglo has a stated intention of selling down its stake in one of the world’s leading gold producers.

While some might have expected Anglo to stand back from this rights issue and allow its holding to be diluted, the company decided to follow its rights because the shares are trading at a substantial premium to the rights offer price.

“By not taking up the right Anglo would be destroying value. It makes sense for us to take up those rights. We will seek to exit at the appropriate time for full value,” said James Wyatt-Tilby, Anglo’s London-based spokesman.

Anglo is buying 11.17 million shares for R194 each, which after the American Depository Shares (ADS) and ordinary shares are exercised, will leave Anglo with 16.5% of AngloGold Ashanti, fractionally down from its current 16.6%.

Click Here to subscribe to our daily newsletter
Other major shareholders including South African investment group Allan Gray and its clients that own 11.2% of AngloGold will follow their rights, as will 8.5% shareholder the Public Investment Corporation.

In the US, the Bank of New York, AngloGold’s ADS rights agent, investors’ uptake reflects a 128% oversubscription representing 28.2 million ADS.

The offer closes at midday South African time on 4 July and the results will be made public on 7 July.

AngloGold will trim some three million ounces out of its hedge book, bringing it down to 6.25 million oz and improving its exposure to the spot gold price. It will reduce its discount to the spot price to 6% at a $900/oz level.