Mvela de­nies threats to deal

CEO Pien­aar dis­misses mar­ket spec­u­la­tion about empowerment prob­lems

Finweek English Edition - - Companies & Markets - BREN­DAN RYAN bren­danr@fin­

MAR­KET SPEC­U­LA­TION THAT An­glo Amer­i­can is un­happy with Im­pala Platinum’s bid for Mve­laphanda Re­sources (Mvela)/ Northam Platinum ( Northam) has been de­nied by Mvela CEO Pine Pien­aar. He says he and Mvela chair­man Lazarus Zim cleared the deal in ad­vance with top ex­ec­u­tives at An­glo Amer­i­can and An­glo Platinum.

“Lazarus Zim trav­elled to Lon­don to meet ( An­glo CEO) Cyn­thia Car­roll and (An­glo chief strat­egy of­fi­cer) Rus­sell King. I met (An­glo Platinum CEO) Neville Nicolau and (for­mer An­glo Platinum joint CEO) Nor­man Mbaz­ima in Jo­han­nes­burg.”

Pien­aar adds that the terms of the trans­ac­tion also change and take prece­dence over the cir­cu­lar to Northam share­hold­ers sent out in early May. That con­tained a num­ber of clauses pro­tect­ing An­glo Platinum’s con­ver­sion rights in terms of black eco­nomic empowerment un­der­tak­ings by Mvela, Mvela Hold­ings and Afripalm Re­sources (Zim’s hold­ing com­pany).

Lazarus Zim trav­elled to Lon­don to meet

Cyn­thia Car­roll.

Those al­lowed An­glo Platinum to buy back “50% plus 1” of all is­sued Northam shares from Mvela “at a 50% or 25% dis- count to their then mar­ket value, the dis­count de­pend­ing on the likely im­pact of the breach on An­glo Platinum’s con­ver­sion rights”.

An­glo spokesman Pranill Ram­chan­der says: “We don’t com­ment on pos­si­ble trans­ac­tions by other min­ing com­pa­nies. How­ever, should such trans­ac­tions in­volve as­sets in­cluded in our empowerment trans­ac­tions we be­lieve that af­ter any such trans­ac­tion our new or­der min­ing right con­ver­sions ac­crued will re­main se­cured.”

The May cir­cu­lar also stated the empowerment re­stric­tions “will ter­mi­nate if and when leg­is­la­tion is pro­mul­gated, which has the ef­fect that An­glo Platinum’s con­ver­sion rights and cred­its are legally se­cured, notwith­stand­ing any breach of the empowerment un­der­tak­ings”.

An­glo an­nounced at end-April it had been granted con­ver­sions for all its old or­der min­ing rights, ex­cept for two that were An­glo Platinum’s Bafo­keng Rasi­mone and Modikwa mines.

Fin­week was un­able to con­firm from An­glo Platinum spokesman Si­mon Te­bello at the time of writ­ing whether the group had ac­tu­ally yet re­ceived the le­gal doc­u­men­ta­tion con­firm­ing the con­ver­sion of its rights.

Pien­aar says the new re­quire­ment is that An­glo Platinum should re­ceive a let­ter from the Depart­ment of Min­eral & En­ergy Af­fairs (DME) that the group’s empowerment cred­its were ir­re­vo­ca­bly se­cured. “We’re wait­ing for that let­ter,” Pien­aar says.

Pien­aar re­peats what he told Fin­week pre­vi­ously: that the deal had been dis­cussed with the DME prior to its an­nounce­ment. “They clearly in­di­cated they sup­ported the deal. We wouldn’t have an­nounced it oth­er­wise.” (See re­port, page 37.)

Con­fi­dent of DME sup­port. Pine Pien­aar

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