ANGLO American Platinum (Amplats) today unveiled a new employee share ownership plan (ESOP) in terms of which it will issue up to R1.8bn of listed shares as well as unlock dividend flow from its underlying subsidiary.
The total dilution as a result of shares Amplats intends to offer was estimated by RMB Morgan Stanley analysts at about 2.6%. It added that the scheme sought to be viewed in the context of its competitive five-year wage agreement signed in May.
In terms of the wage deal, Amplats agreed to an average increase in wages of about 6.6% annually over the term of the deal, with the option of either side revisiting the terms after three-years.
This compares to South Africa’s headline consumer inflation of 7.6% for August, down from 7.8% in the previous month. Analysts polled by Reuters suggested consumer price inflation may well have peaked although financial markets are factoring in continued global inflation for the foreseeable future.
The ESOP sees Amplats allocate shares either from the treasury or the open market at a cost of R8,000 apiece at an annual cash outflow to Amplats of R170m per year. Each tranche vests three years after allocation meaning that employees can either hold on to their shares or they can sell them.
The ESOP is Amplats’ third and replaces the previous scheme which expired in 2020, however, the new scheme includes an ‘evergreen’ innovation in which qualifying employees will also receive shares in the underlying subsidiary, Rustenburg Platinum Mines.
Shares at this level cannot be redeemed by the holder but allow dividend flow, when cash is returned. The estimated day one value of the 2% evergreen shares based on the 30-day volume weighted average price as of September 27 is R6bn, the group said.
“Every colleague in our business plays a crucial role in mining and processing the metals that enable so much of our everyday lievesand a cleaner future for our planet,” said Amplats’ executive head of human resources, Virginia Tyobeka.