Froneman stumps up R19m as follows rights in Stillwater deal

Neal Froneman, CEO, Sibanye-Stillwater

NEAL Froneman, CEO of Sibanye Gold, has subscribed for R19.4m shares in the company in terms of its $1bn rights issue, the proceeds of which will part fund the $2.2bn takeover of Stillwater Mining.

In terms of his primary subscription on June 12 and excess allocation, in which shareholders were offered the balance of the overall 97% subscription by shareholders, Froneman bought 1.7 million shares at R11.28 per Sibanye share.

CFO, Charl Keyter, bought R3.7m worth of Sibanye shares while Barry Davison, the former CEO of Anglo American Platinum, and a non-executive director on the Sibanye board, bought roughly 640,000 shares for a sum of R7.3m.

Analysts said the rights issue – priced at R11.28 per share – represented a 60% discount to Sibanye’s close on May 18 of some R28.48/share. The counter-argument from Sibanye is that in exercising the rights shareholders retain their exposure to the company.

Sibanye has embarked on a roadshow for a $1bn bond which it will use to partly repay a $2.65bn bridging finance raised to finance the Stillwater deal which recently won shareholder support at Sibanye and Stillwater.

The rights offer is remarkable in a number of ways as it represents the third largest issue of shares to fund a transaction ever in South Africa’s corporate history.

It is the largest equity raise in the EMEA region since Glencore bid for Xstrata and is the largest rights ever in South Africa to part fund a transaction.

Once Stillwater has completed its $175m to $190m Blitz project, Sibanye’s platinum group metal (PGM) production will near about one million ounces a year. This will make Sibanye the world’s third largest palladium/platinum producer and the fourth largest 4E PGM producer.