Anglo American took a “critical next step” in the demerger of its platinum group metal (PGM) subsidiary on Tuesday, calling on shareholders to approve the separation of Anglo American Platinum (Amplats).
The proposed demerger is set to come into place from May 31, but the process hinges on shareholder approval at Anglo’s upcoming general meeting on April 30.
The news came alongside an announcement that Amplats’ prospectus to UK financial authorities had also been approved, with Amplats expected to gain a secondary listing on the London Stock Exchange from June 2.
Amplats CEO Craig Miller said he believed that listing on the LSE, while keeping a primary listing on the JSE, would further benefit the company’s “geographically diverse shareholder base and assist in building the group’s profile and providing a larger market for trading in our shares”.
Anglo CEO Duncan Wanblad said that “while there have been many benefits of being part of Anglo, it became increasingly clear that the valuation and value creation prospects of both companies could be better optimised as two entirely separate entities”.
“Amplats is now set up to thrive independently and, with the exceptional management team in place, now is the right time to demerge the business,” Wanblad told investors on Tuesday.
However, Amplats said in its latest annual results that it was likely to incur “significant” one-off set-up costs to operate independently, and that some or all of the anticipated benefits of the demerger may not be realised.
It also said that the stand-alone outfit “will not be able to rely on certain existing sources to fund its future capital requirements and financing from new sources may be available on less favourable terms”.
Anglo has already cut an 11.9% stake out of its original 79% shareholding in Amplats and plans to retain 19.9% of the company once the demerger is concluded.
The process will see Anglo shareholders each receive 110 Amplats shares for every 1,075 Anglo shares they hold.
The separation from Anglo will also see the group take on a new name — Valterra Platinum.
To make the demerger more efficient and support Amplats’ share trading liquidity, Anglo said it had already increased Amplats’ free float by more than 50% and reduced by 40% the number of Amplats shares that will be distributed through the demerger.
Anglo is also seeking shareholder approval to implement a share consolidation alongside the demerger, aimed at keeping its share price consistent throughout the process. The effective date for the share consolidation is set for June 1, said the company.
“All of our managed mining assets are in the first half of the cost curve which, with our leading integrated value chain, provides us with meaningful pathways to deliver value-accretive growth,” Miller.
“With global PGM supply in deficit, minimal industry investment in new production capacity and a strong case for enduring demand, we are confident about the medium and long-term outlook for PGMs. Together with our discipled approach to capital allocation and robust balance sheet, we are positioned strongly to continue delivering leading shareholder returns through the cycle.”
Update: April 16 2025
This article has been updated to remove a sentence indicating the percentage of Amplats shares to be distributed among Anglo shareholders.
With Kabelo Khumalo
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