NORTHAM Platinum is to strengthen its grip over the future direction of Royal Bafokeng Platinum (RBPlat) by having its principal directors, the CEO Paul Dunne and Aletta Coetzee, Northam’s CFO, elected to the RBPlat’s board.
RBPlat said in a statement to the Johannesburg Stock Exchange this morning that Northam had asked it to convene a shareholders meeting for the purpose of the elections – both of which would be non-executive. This is in terms of the Companies Act which allows for a majority shareholder to have representatives at board level.
On November 9, Northam said it would buy a 32.76% stake in RBPlat from Royal Bafokeng Holdings for R17bn in shares and cash. The offer trumped Impala Platinum (Implats) which had earlier announced plans for the 100% takeover of RBPlat.
“The board will take appropriate steps to deal with its obligations in accordance with the Companies Act, the JSE listings requirements and the company’s memorandum of incorporation,” said RBPlat regarding Northam’s request.
With two seats at the table, Northam Platinum will be able to influence where RBPlat goes from here especially should Implats return with its own proposal for RBPlat that could involve a joint venture. In that scenario, Implats could potentially buy the balance of RBPlat shares not owned by Northam, although Northam has the option of increasing its stake to just below 35% of the company.
In a note on November 16, Noah Capital Markets analyst René Hochreiter said a joint venture between Northam and Implats in RBPlat’s assets “made a lot of sense” and that the future of Implats’ Rustenburg operations “depends on it” post 2030.
The Rustenburg (Lease) mines had more natural synergies with the neighbouring RBPlats’ Styldrift and Bafokeng Rasimone Platinum Mines operations whilst Northam’s assets were much farther away. However, Implats would need 50% plus one share and manage the RBPlats operations for both sides to benefit from those synergies, Hochreiter said.
“Implats may even pay up front for the synergies by adding a premium to their average bid to RBPlat shareholders; Implats’ Lease area needs life,” said Hochreiter. “Northam would benefit if it shared in the synergies, which we think will run into R2bn to R3bn, even if it must split the synergies with Implats,” he said.