Angloplats set to dilute investors
R12.5bn rights offer will help repay debt
February 9, 2010
By Asha Speckman
Anglo Platinum (Angloplats), has resorted to diluting its shareholders in a bid to scrap a portion of the R19.3 billion debt on its balance sheet.
The company announced yesterday in its feedback for year-to-December results that it would issue a rights offer of R12.5bn, which would open on March 8 and close on March 26. The proceeds from the rights offer will be used to repay long-term debt.
At December 31 the company had gross debt of R23bn, of which R20bn was outstanding under facilities provided by Anglo American - its largest shareholder - and R3bn outstanding under facilities provided by other financial institutions.
The company said this would enable it to extract value from existing operations through cost and productivity improvements and optimising its premium portfolio of assets and growth projects.
Dividend payments will resume once the markets and operating profit improve.
Angloplats' headline earnings for the year ended December 31 decreased 95 percent to R710 million and R2.98 a share. The mining house said the main factors contributing to this decrease were lower dollar prices realised on metals sold, offset by higher sales volumes and insurance income.
Net sales revenue decreased by R14.1bn to R36.7bn. The company met its production target and produced 2.45 million ounces of refined platinum. It had set a target of 2.4 million ounces.
Its unit cost of production at R11 236 was the same per equivalent refined platinum ounce last year as in 2008. Its capital expenditure for the year, R9.7bn, was down R3.1bn compared with 2008.
"Project capital spend is now directly related to our long-term ounce requirements and the reduction in the rate of spend resulted in a number of our projects being delayed, including Tumela, Twickenham platinum mine, and Styldrift Merensky phase one," said Neville Nicolau, the chief executive. As part of its restructuring process, Angloplats placed three of its high-cost shafts, Siphumele 3, Siphumele 2 and Khuseleka 2, onto care and maintenance indefinitely.
The company has trimmed its staff complement, including head office, by 18 786 people since October 2008. Fatalities were down 25 percent from the previous quarter, from 18 deaths to 13 deaths.
Looking ahead, Nicolau said the focus was on safety, and achieving this year's production target of 2.5 million ounces of refined platinum at a cost of R11 000 per ounce.
Angloplats shares rose 6.54 percent in JSE trading yesterday, to close at R733.
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