[miningmx.com] – NORTHAM Platinum CEO, Paul Dunne, described today’s vote for the firm’s R6.6bn black economic empowerment (BEE) deal as “tremendous” and “unheard of” after 99% of shareholders approved the transaction.
“Given all the emotion that surrounds BEE, especially at the moment, to get this approved is unheard of. It is a tremendous result,” he said. About 90% of shareholders voted on the transaction which provides Northam with R4bn in cash and 35% BEE.
The transaction also moves Northam into a R3bn net cash position which Dunne said would be utilised for transactions in the short to medium-term. “We intend to grow down the cost curve by accessing shallow, mechanisable orebodies,” he said.
“We will also drive consolidation. We intend to be a consolidator,” he added.
The structure of the deal sees Northam issue 22% in new shares to a special purpose vehicle (SPV) for BEE to which the Public Investment Corporation (PIC) will also sell shares equal to 9% of Northam.
The SPV, which consists of an employee share option programme, a community trust, and other consortiums, one consisting of a womens’ group, will own 31.4% of Northam.
Including Northam’s previously executive Toro Trust, total BEE will be 35.4% which is roughly 10% more than required by South Africa’s mining charter.
Payment for the shares issued to the BEE entities will be financed by the SPV which will issue 159.9 million in listed preference shares which will be underwritten by prominent shareholders, PIC and Coronation Asset Managers.
Another aspect of the deal is that in order to make sure the BEE funds don’t sell their shares in Northam, the company has made sure there’s an immediate R400m benefit to them in return for a 10-year lock-in agreement.
Asked on his view of the platinum market, Dunne said he was generally in agreement with Impala Platinum which had taken a ‘lower for longer’ approach.
“In our case, it’s a real benefit that we have been able to beef up our balance sheet during the current market conditions.”
