Anglo to list Amplats in London to lessen ‘flow-back’

London Stock Exchange LSE

ANGLO American will list its 79% owned subsidiary Anglo American Platinum (Amplats) in London in an effort to stem capital outflows when the group unbundles its shares.

“What we would be looking to do is set up a listing on the UK stock exchange to help manage that potential flowback,” Anglo American CEO Duncan Wanblad told BusinessLive in an interview.

Amplats is “a fantastic business … characterised by the most astounding assets, particularly Mogalakwena, and … a competitive advantage that is second to none,” Wanblad told the newspaper.

Some Anglo shareholders are not permitted to hold single stock shares or companies listed in Johannesburg, while others would not prefer it. As a result, there’s expected to be a major overhang on the Amplats share price when Anglo unbundles its stake in terms of its restructuring plan.

The plan, which also includes the sale of its metallurgical coal assets and De Beers, was announced on May 14 in the teeth of takeover proposals by BHP, the Australian miner. On Wednesday, Anglo declined to extend talks with BHP, effectively rejected the proposals.

A successful takeover of Anglo by BHP – which also included the unbundling of Anglo’s stake in Kumba Iron Ore among its proposals – could have lead to outflows of $4.3bn from South Africa, according to a report by JP Morgan.

According to JP Morgan, developed-market funds would sell $9.4bn in stock and $5.1bn would be bought by emerging-market investors, resulting in the net outflow.