ANGLO American is to sell a further block of shares in its Johannesburg-listed subsidiary Anglo American Platinum (Amplats), the UK group said.
An additional 6% of Amplats would be sold in an accelerated bookbuild – equal to 16 million shares – the group announced on Tuesday. Were the shares sold at Amplats’ closing price today, it would raise about R9.59bn for Anglo.
Including the previous placement of Amplats shares, completed on September 11 and raising R7.2bn, the second bookbuild today would increase Amplats’ free float of shares by 50%, Anglo said.
Anglo added that it did not plan a further sale of shares in Amplats ahead of the unbundling of its stake in the company, expected to be by the middle of 2025.
Commenting on the benefits of this second bookbuild, Anglo said it would reduce the number of shares distributed through the demerger of Amplats and “so mitigate the risks of market disruption from subsequent flowback”.
Shares in Amplats have gained about 18% since completion of the first bookbuild even though platinum and palladium prices are 1.3% and 6% weaker respectively.
“This placing will consolidate the benefits of our prior sell down by further mitigating the potential impact of flowback by creating increased trading liquidity, while further strengthening our business as we take another major step towards portfolio simplification through our world-class positions in copper, premium iron ore and crop nutrients,” said Duncan Wanblad, CEO of Anglo.
Analysts expected the lockup following the previous bookbuild to expire on or around December 9. “The bookbuilding period for the placing will commence with immediate effect,” Anglo said.
A successful second bookbuild in Amplats shares would give further momentum to Anglo’s restructuring plans, unveiled in May amid BHP’s takeover attempt.
Anglo announced on Monday that it would sell the remainder of its 15 to 17 million tons (Mt) a year coal mines for $3.8bn in a cash deal with US group, Peabody Energy.
Including the November 4 sale of its Jellinbah East and Lake Vermont mines in Australia to Zashvin for about $1.06bn the total consideration for its metallurgical mines could be about $4.8bn – well in excess of the $3bn to $4bn previously estimated by analysts.
“We see Anglo American executing on its announced restructuring plan and see further catalysts from here,” said analysts at Bank of America.
“Given Amplats’ strong balance sheet, we see potential for a buyback to manage flowback or special dividend pre demerger to de-lever new Anglo,” said UBS.
Anglo was also making progress with the sale of its nickel assets, but the sale of De Beers, the final piece in the restructuring jigsaw, might take longer to materialise.
One mote of good news was that finalisation of a new marketing agreement with Botswana had improved following the election of Duma Boko, head of the Umbrella for Democratic Change coalition as the nation’s new president on November 1.
Boko was quoted as saying Botswana had to protect its diamond “nest egg”. He commented that: “The relationship with De Beers could have been damaged by the way the negotiations were handled,” referring to former Botswana president Mokgweetsi Masisi.
