AngloGold Ashanti (GSE:AGA, GSE:AADS) has unveiled a major corporate restructuring in which it will move the primary listing of its shares to New York from Johannesburg, and domicile the business in London. The Johannesburg corporate office will be retained.

     

    Alberto Calderon, CEO of AngloGold Ashanti said a primary listing on the New York Stock Exchange would help improve his company’s liquidity and a rating of its shares. AngloGold estimates it currently trades at a 25% discount to rivals.

     

    A secondary listing would be maintained on the JSE as well as on the Ghana Stock Exchange but the company would delist from the Australian Stock Exchange.

     

    “The changes announced today will complement the work already underway to reduce our cost of capital, enhance our cost competitiveness versus our peers and optimise our portfolio by providing improved access to the world’s largest capital markets and pool of gold investors,” Calderon said.

     

    AngloGold has no assets in South Africa after selling Mponeng to Harmony Gold for $300m in 2020. Two years earlier it had sold Moab Khotsong, also to Harmony. The firm’s plans for its primary listing had been “a persistant question from shareholders after selling the assets,” Calderon said.

     

    “A primary listing in the US is expected to create enhanced access to the world’s deepest pools of capital, including the opportunity to improve share trading liquidity,” the company said.

    Trade in its ADR programme in New York generates two-thirds of daily liquidity even though US investors comprise 35% of the share register.

     

    The transaction will cost AngloGold about $500m which is the amount of a 5% withholding tax that falls due as a result of creating the London domicile. Given there is a tax treaty with the UK, South African shareholders will not pay any withholding taxes; nor will the move impact the portion of offshore shares South African investors are allowed to hold.

     

    But the restructure will inevitably reflect poorly on South Africa as an investment destination especially following events yesterday in which the US ambassador alleged the country had supplied Russia with arms.

     

    The political crisis, coupled with growing fears about the ability of Government to address power shortages saw a massive sell off in the rand on Thursday. It slid to R19 to the dollar – the first time since the COVID-19 lockdown in 2020.

     

    Calderon said the restructure was part of his efforts to improve the competitiveness of the company in which the Colombian has also vowed to cut AngloGold’s operating costs. “This is not about South Africa,” he said. “I can’t comment on internal politics [of South Africa], but we are proud of our heritage and our people.”

     

    In terms of the Johannesburg office which employs about 280 people, AngloGold said there would be no impact on jobs; nor were any local board changes planned. The company employs about 30,000 people globally.

     

    AngloGold investigated a change in primary listing and domicile in 2018 while under the leadership of former CEO Kelvin Dushnisky. Although no application was formally made, speculation about AngloGold’s plans drew the ire of the South African government which threatened sanctions.

     

    In contrast, the plans announced today have the approval of the South African Reserve Bank. Calderon said that during discussions with South African authorities it was acknowleged that “there is a time to invest and a time to disinvest”.

     

    Shareholders would be required to vote on the proposal. “A supermajority of 75% is required,” said Calderon. He declined to comment on the view of the South African government-owned Public Investment Corporation which owns 15.7% of AngloGold. “We have engaged with a significant part of our shareholders,” he said.

     

    It was envisaged the transaction would be completed by September.

     

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