Anglo American has raised approximately $400 million by selling shares in its South African platinum subsidiary at a discounted rate, as part of a broader effort to streamline its business ahead of a demerger next year. The London-listed miner, one of the world’s largest diversified resource groups, sold 13.94 million shares in Anglo American Platinum (Amplats), reducing its stake in the unit from 78.6% to 73.3%.
The shares were sold at 515 South African rand ($28.70) each, reflecting a 9.7% discount on the previous day’s closing price. The sale is intended to increase the proportion of publicly traded shares in Amplats, reduce the number of shares distributed to Anglo’s shareholders following the demerger, and mitigate the risk of a sharp sell-off when the separation is completed.
The restructuring comes in the wake of a $50 billion takeover attempt by Australian rival BHP, which Anglo successfully rebuffed earlier this year. The company is now under pressure to prove it can create sustainable value for its shareholders, who will receive shares in the newly separated businesses. As part of this overhaul, Anglo American is in the process of spinning off its platinum-metals, diamonds, coal, and nickel assets, restructuring its portfolio to focus on high-value operations.
Struggling with Platinum Prices
The sale comes at a challenging time for Amplats, which has been hit hard by persistently low platinum prices. The world’s largest platinum-metals miner by output reported a 67% drop in adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) last year. In February, the company announced plans to cut 3,700 jobs in an effort to reduce costs.
Despite Anglo American’s successful placing, Amplats shares fell by 8% to 525.10 rand in early trading on Wednesday, deepening its year-to-date decline to 46%. Analysts warn that further share sales could exacerbate pressure on Amplats stock in the short term. Deutsche Bank analyst Liam Fitzpatrick noted that another sale in the first half of 2025 is “possible” given Anglo’s strategy to raise liquidity from its subsidiaries.
Shareholder Value Strategy
For Anglo American, this sale is just one step in a broader strategy designed to streamline its operations and boost shareholder value. Having rebuffed BHP’s all-share offer, Anglo’s management must now demonstrate that its restructuring plan will outperform the value that might have been realised from the merger.
Despite this pressure, Anglo American’s own shares rose modestly by 0.4% on Wednesday, having climbed as much as 2% earlier in the trading session. Investors appeared cautiously optimistic about the company’s long-term prospects, even as the outlook for its platinum subsidiary remains clouded by market conditions.
Settlement of the placing shares is scheduled for on or around 16 September.
