[miningmx.com] – NORTHAM Platinum’s proposed black economic empowerment (BEE) and growth strategy received a boost after investors hoovered up 13% of the company at R48,25 per share in a book-build worth R2.5bn.
A total of 51.7 million shares in the platinum firm were placed in a book-build after ENRC, which is now held in private company, Eurasian Resources Group, said it viewed the stake as non-core and would divest of it.
The shares were placed at a mere 1% discount to Northam’s share price the day prior to the book-build – an outcome that Paul Dunne, CEO of Northam, said was “positive” as it extended to the firm’s BEE transaction, valued at R6.6bn.
“We are very pleased to again see the strong institutional support for Northam in a difficult platinum market. It is also very positive to see that this support extends to Northam’s BEE transaction,’ he said in a company announcement.
Shares in Northam were down about 1.8% today but are a fifth higher on a 12-month basis. The company is valued at R19bn – R7bn more than Lonmin – having gained 39% since the beginning of the year.
Northam said “all of the institutions” had expressed support for Northam’s BEE deal which goes to a shareholder vote in just over a week, on March 19.
“These expressions of support, combined with the irrevocable undertakings already received from other Northam shareholders to vote in favour of the resolutions pertaining to Northam’s BEE transaction … indicate strong support,” it said.
The BEE deal, which was announced on October 22, provides Northam with R4bn for production growth through brownfields and acquisitional expansion, and will see it issue 22% of its share capital to a special purpose vehicle (SPV) for BEE to which the Public Investment Corporation 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, the company said last year.
In terms of growth, Northam in February announced it would buy the mothballed Everest South operation from Aquarius Platinum for R450m which would contribute towards a potential lift in output of 500,000 platinum group metal ounces a year taking total output of some 800,000 oz/year.
