ANGLO American is keeping its options open regarding the divestment of its 19.9% stake in Valterra Platinum, including a sale to a strategic investor.
“It is on the table,” said Duncan Wanblad, CEO of Anglo American in an interview with Miningmx on July 31 when asked about a third-party sale.
“Obviously practicalities will define this, from our perspective, as will the market at the time,” he said. “But all of those options… a sale that’s consistent with the guidance that we’ve given in one or two or three tranches, or possibly a strategic buyer.”
Anglo agreed to a 90-day restraint on selling its stake in Valterra, formerly Anglo American Platinum, following its demerger from Anglo on May 31.
However, Wanblad said his company was not in a particular hurry to divest itself of Valterra shares. “We are not trying to time the market,” he said, referencing a recent lift in platinum and palladium prices this year.
“We’ve been very focused on setting up this deal in such a way that it has the least impact – or rather a positive than a negative impact for all shareholders,” he said.
“When we do exit this stake, we have to absolutely exit at the right time and the right pace for Valterra, as well as us. But that’s much more of a driver than have we picked exactly the sweet spot in terms of timing from a market point of view,” he said.
Wanblad added Anglo was not under any balance sheet pressure to sell the shares. “This is really a portfolio optimisation, and so as soon as it’s reasonably possible, we’ll do it – we’re not impacting Valterra as a result.”
Anglo reported a $400m increase in net debt to $10.8bn as of June 30, equal to a ratio of 1.8x to earnings before interest, tax, depreciation and amortisation (EBITDA). This was “elevated” owing to the restructuring Anglo was undertaking, the group said at its interim results presentation last week.
It expects to return to a ratio of below 1x net debt to EBITDA once it had sold its stake in Valterra Platinum, which is currently worth about $2.4bn. A further $3.8bn was expected to be collected from the sale of its metallurgical coal assets, although the planned sale is subject to possible arbitration after buyer Peabody Energy raised the prospect of a dispute.
A further $0.5bn is due from the sale of Anglo’s nickel assets, whilst the trade sale of its 85% stake in De Beers is still in progress. Wanblad said last week the group intended to press ahead with its sale rather than an IPO, although that route was still being developed as a fallback option.
