Anglo American supports Anglo Platinum’s $1.6 billion rights offer
08 February, 2010
Anglo American plc announces that it has undertaken to subscribe in full to its entitlement to the rights offer announced today by its subsidiary company, Anglo Platinum.
Following the rights offer, Anglo Platinum will have a more balanced capital structure, enabling it to focus on extracting value from its existing operations through further cost and productivity improvements and optimising its premium portfolio of assets and growth projects through disciplined investment. Anglo Platinum’s dividend payments will be resumed when market conditions and the operating environment permit.
Anglo Platinum expects to raise gross proceeds of approximately ZAR12.5 billion (approximately $1.6 billion) through the rights offer and Anglo American will take up its rights in full associated with its 79.72% shareholding in Anglo Platinum, equivalent to approximately ZAR10 billion (approximately $1.3 billion). Anglo American has also agreed to underwrite the minority portion of the rights offer. This underwriting and Anglo American’s undertaking to subscribe in full for its rights are subject to customary underwriting conditions.
The proceeds from the rights offer will be used by Anglo Platinum to repay debt, including intercompany debt between Anglo American and Anglo Platinum. Following the rights offer, Anglo Platinum’s pro forma net debt, as at 31 December 2009, will be ZAR6.8 billion (approximately $900 million).
The take-up of rights by Anglo American and repayment of intercompany debt by Anglo Platinum will be, in effect, an exchange of debt for equity. As Anglo Platinum is fully consolidated within the financial results of Anglo American, the expected ZAR2.5 billion of subscription proceeds from Anglo Platinum’s minority shareholders will reduce Anglo American’s group net debt.
This announcement does not constitute or form part of any offer or solicitation to purchase or subscribe for securities in the United States. The securities have not been and will not be registered under the US Securities Act of 1933 (the "Securities Act") or the securities laws of any state or any other jurisdiction of the United States. Consequently, they may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer of securities in the United States.
This press release includes statements that are forward-looking in nature. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.