AngloGold forced to sell assets to pay debt
November 10, 2008
By Millie Munshi and Stewart Bailey
Johannesburg - The global credit crisis had made selling assets “imperative” for AngloGold Ashanti, chief executive Mark Cutifani said on Friday, as the firm seeks to raise cash to repay debt and invest in new gold projects.
AngloGold was working on asset sales in Mali and South Africa and nothing was “sacred’’, Cutifani said in an
interview in New York. Anglo-Gold would target a return on capital of at least 15 percent on its remaining mines, he said.
The financial crisis has made it harder for companies to borrow money and fund new projects. Mining and materials companies faced tightening availability of debt finance and the prospect of slower growth, Standard & Poor’s Ratings Services said in a report last month.
“There’s no money at all. It’s a little bit surreal,” said Cutifani, the head of the Johannesburg-based firm since
October 2007. “Credit is a function of trust, and trust is gone.”
AngloGold is seeking to raise cash to repay $1 billion (R10.2 billion) in debt that is due next year and to fund investment in gold mines in Colombia and Australia.
“We’ve got things sitting on the balance sheet that aren’t doing anything,” Cutifani said. “Uranium tailings –we’re looking at selling our Tau Lekoa mine. We’ve already talked about selling our Mali assets.”
AngloGold’s American depositary receipts, each equal to one share, rose 4.9 percent, to $17.92 in New York Stock Exchange composite trading. - BLOOMBERG
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