ANGLO American confirmed on Thursday morning it had concluded the sale of its entire remaining 19.9% stake in Valterra Platinum, formerly Anglo American Platinum prior to its demerger in May.
The sale of 52.2 million shares at a price of R845 per share, concluded by means of a bookbuild through Merrill Lynch and Standard Bank, raised R44.1bn. The shares were sold at a 9.3% discount to Valterra’s closing price which had gained 8% on Wednesday.
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 in July.
The income from Valterra would help the group return to a ratio of below 1x net debt to EBITDA, as targeted last month.
Commenting on Wednesday evening when the prospect of the transaction was unveiled, Anglo noted the strong performance of Valterra shares since the demerger.
“Valterra Platinum has made a strong start as a standalone company and we continue to have every confidence in its future as the world’s leading integrated value chain producer of PGMs,” said Duncan Wanblad, CEO of Anglo.
“This placing marks further progress in our responsible separation process and a further step in our portfolio simplification to focus on our world-class positions in copper, premium iron ore and crop nutrients,” he added.
Platinum and palladium have staged a strong recovery so far this year up 58% and 19% respectively. The metals helped soften the blow of a rain-interruped first quarter for Valterra, known as Anglo American Platinum whilst a listed subsidiary of Anglo. Valterra slid into net debt as of June but expects to be debt neutral by year-end.
As for Anglo American, the sale of the remaining shares in Valterra come at a time when a restructuring involving the sale of its metallurgical coal, nickel and diamond assets, unveiled by Wanblad in May last year, runs into headwinds.
Botswana has a strong stance on the proposed sale of Anglo’s 85% stake in De Beers saying it wants to buy the company, potentially making the divestment more complex. In addition, US coal miner Peabody Energy has pulled out of the $3.8bn purchase of the metallurgical mines.
Most recently, Brazil opened an investigation into Anglo’s proposed disposal of its nickel assets in the country, according to a report by the Financial Times on Wednesday.
