Anglo Platinum announces US$1.6bn rights offer

Finance

Publishing Date: 08 Feb 2010 11:48am GMT
Author: Mining Journal

Debt-laden Anglo Platinum Ltd has announced a R12.5 billion (US$1.6 billion) rights offer, fully underwritten by its parent company, Anglo American plc.

The raising will be used to reduce the net debt of the world’s largest platinum producer to R6.8 billion from R19.3 billion (as of end-December).

With Anglo American loans making up about R20 billion of Anglo Platinum’s R23 billion in gross debts, the take-up of rights will be, in effect, an exchange of debt for equity.

If minority shareholders fully take up the offer then Anglo, which fully consolidates Anglo Platinum in its financial results, will reduce its own debt by R2.5 billion. Anglo American owns 80% of the company.

Net debt grew by 43% from R13.47 billion in the financial year to end-December, as operational cash flow of R5.5 billion could not meet capital expenditure requirements of R11.3 billion. Capital expenditure is expected to be R8 billion over the next two years.

The rights offer is expected to close on March 26, with the results announced on March 29.