ANGLO American Platinum (Amplats) will distribute R2bn worth of its shares to community trusts after the rapid rise in the group’s share price triggered the payout of a scheme devised in 2011.
The scheme, known as Alchemy, involved the issue of some 6.3 million Amplats shares at a price of 10 cents per share to Lefa Le Rona Trust (LLRT) – an umbrella trust on behalf of regional development trusts. Dividends from the shares during the nine years from launch to now were used to service the scheme and to pay out LLRT some R300m.
In July, however, Amplats shares moved high enough to trigger the scheme’s payout such that Amplats will now repurchase about 4.9 million of the issued shares (not from the open market) in order settle the scheme. This will leave a balance of 1.4 million shares for use by the LLRT.
The shares held by the LLRT have a market value of about R2bn, Amplats said. Shares in Amplats have increased about 57% over the past 12 months owing to elevated palladium and rhodium prices and the weakness of the rand against the dollar.
Community enablement could not be more relevant than in the current environment as South Africa begins what is likely to become an extended period of economic recession, partly brought about by the Covid-19 pandemic.
“I am delighted to announce that our community share scheme Alchemy, set up in 2011 has delivered on its objective of creating sustainable share value to our host communities and specific communities from where our employees originate in the Eastern Cape, North West and Southern African Development Community (SADC) countries,” said Natascha Viljoen, CEO of Amplats in a statement.
Viljoen told Miningmx in June that the company was prepared for potential community disruption – yet to materialise – on the back of Covid-19 and regional economic hardship.
The shares held by LLRT cannot be transferred, sold or encumbered until the end of the Alchemy Scheme period in December next year.
Thereafter, 40% of the shares can be distributed to the various development trusts on a proportional basis for monetisation. The remaining 60% of shares held by LLRT are subject to a twenty year lock-in period to the end of December 2041.
Commenting in a Miningmx article in July, Yvonne Mfolo, head of Amplats’ corporate affairs, said: “We are part of an ecosystem … communities will remember you for how you supported them through a crisis, and this is another way of us buying goodwill, both from government and from the communities where we operate as well”.
