ANGLO American said on Wednesday it had sold 17.5 milliion shares in Anglo American Platinum (Amplats) in an accelerated bookbuild, raising R9.6bn.
Shares in the Johannesburg listed subsidiary were sold to investors at R548 per share, representing a 8.5% discount to Amplats’ closing in Johannesburg on Tuesday.
The shares issued represent some 6.6% of Amplats’ issued share capital and increases the company’s free-float by 50% when combined with an earlier bookbuild in September.
Following the disposal Anglo American now holds 66.7% of the issued ordinary shares in Amplats, the platinum company said in a separate announcement today.
Announcing its intention to sell Amplats shares yesterday, Anglo American 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”.
“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 analysts at Swiss bank, UBS, in a note earlier this week.
This is in terms of Anglo’s plan to unbundle its stake in Amplats which it added was on track for completion by the middle of 2025.
“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.
A successful second bookbuild in Amplats shares would give further momentum to Anglo’s restructuring plans, unveiled in May amid BHP’s takeover attempt. In addition to the unbundling of Amplats, Anglo also set out to sell its Australian coal mines, its nickel mines, and its 85% stake in De Beers.
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.
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.
