Am­plats faces tough task to exit oper­a­tions in SA

CityPress - - Business - – Bloomberg

An­glo Amer­i­can Plat­inum (Am­plats) could face a pro­tracted exit from lo­cal mines it wants to divest of amid a plunge in me­tal prices, which is hurt­ing as­set val­ues and in­vestors’ ap­petite for deals.

Am­plats is ex­pected to pro­vide an up­date on how it will dis­pose of four age­ing, labour-in­ten­sive mines when it re­leases its re­sults to­mor­row.

The com­pany said in Fe­bru­ary it would de­cide by June whether to sell or sep­a­rately list the oper­a­tions should bid­ders not meet the pro­ducer’s val­u­a­tions for the as­sets. Par­ent An­glo Amer­i­can was lean­ing to­wards a list­ing, CEO Mark Cu­ti­fani said in April.

Am­plats plans the dis­pos­als amid a 32% drop in the plat­inum price in the past 12 months and as costs in­crease. Ac­cord­ing to Ben Davis, a min­ing an­a­lyst at Liberum Cap­i­tal in Lon­don, the most likely sce­nario was that it would spin off the as­sets as an in­de­pen­dent com­pany while selling shares for a por­tion in the new en­tity.

“I cer­tainly won’t hold it against them that they didn’t get the sale away when plat­inum prices are where they are,” said Davis. “I don’t re­gard a list­ing as a great idea ei­ther, be­cause I don’t see how any­one could as­cribe any real value to it.”

Am­plats spokesper­son Mpumi Sithole said: “Our ob­jec­tive is to exit the Union and Rusten­burg mines in the most ap­pro­pri­ate man­ner ... through ei­ther a sale or public-mar­ket exit, to max­imise value for share­hold­ers.”

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