Anglo American Platinum (Amplats) share price ticked 2.9% lower to R582.13 in afternoon trade on the JSE after its parent company, Anglo American, announced yesterday it had trended down its interests in the South African platinum group metals (PGM) miner by 6% in a deal criticised by watchers as negative for shareholders.
Anglo American is disposing of its steel-making coal, platinum, diamonds and nickel operations as it restructures its operations to focus on copper and crop nutrients.
After announcing the disposal of its Australian steelmaking coal operations on Tuesday, the focus for Anglo American is now on the demerger of Amplats.
This gathered speed yesterday when Anglo American announced that it had “sold 17,500,000 ordinary shares (in) Anglo American Platinum,” representing 6.6% of the total issued ordinary share capital of the company.
The shares were sold at a price of R548 per share, a price described by market watchers as bottom of the market.
“Selling another huge chunk of Amplats at, if not the bottom of the PGM market, then a lot closer to bottom than top. And selling their Oz coal mines to Peabody. All this unlocking of significant value is becoming tiresome, and alarming, for shareholders,” wrote investor and market watcher, Karin Richards on X yesterday.
Others market watchers were of the belief that the restructuring was helping to shore up Anglo American’s cash position and helping to reduce its debt.
Anglo American said the disposal of the 6.6% stock in Amplats had raised gross proceeds of R9.6 billion, with Amplats not receiving any of the proceeds from the transaction as it is not a party to the Placing.
Following completion of the transaction, Anglo American’s remaining shares in Amplats will be subject to a lock-up of 90 days. This is the second time that Anglo American has undertaken a bookbuild in Amplats after it raised R7.5bn in the initial transaction in September.
Bruce Williamson, mining analyst at Integral Asset Management, said at the time that the management of Anglo American could be “thinking that the pressure on the PGM basket price will continue” and opting to complete bookbuild transactions “as they wait to conclude” the Amplats demerger.
In September, the company said that the initial placing of shares in Amplats was “intended to broaden the free float of Anglo American Platinum, reduce the number of shares distributed to Anglo American shareholders upon demerger and thereby reduce flowback” following the demerger.
“The demerger of Anglo American Platinum is on track for completion by the middle of 2025 and, on this basis, Anglo American does not intend to execute a further market sell-down of its holding ahead of that,” said Anglo American yesterday.
BUSINESS REPORT