South Africa – Zambezi Platinum, the special purpose vehicle created to house the newly constituted HDSA shareholding in Northam Platinum, will be admitted to the main board of the JSE today.
Zambezi Platinum will be issuing preference shares which are tradeable on the exchange. The JSE listing also provides a broader section of the public, other than Northam shareholders, an opportunity to invest in the preference shares.
The establishment of Zambezi Platinum follows on the back of a ground-breaking empowerment transaction concluded by Northam on 19 March 2015, when shareholders voted overwhelmingly in favour of the deal.
With the conclusion of this transaction Northam has a sustainable Historically Disadvantaged South African (HDSA) equity holding which complies with the Mining Charter’s ownership requirements.
Through a concurrent capital raising, Northam also raised R4.6 billion to support its strategic objectives of growing the business. This has already progressed with the acquisition of the Everest mine, now known as Booysendal South.
In October 2014, Northam Platinum first announced the conclusion of a successful equity raising of R4.6 billion, in conjunction with a fully-funded R6.6 billion Black Economic Empowerment (BEE) transaction.
The dual and inter-related transactions secure a sustainable 35.4% HDSA interest in Northam and, at the same time secure funding for the company’s growth ambitions.
Key features of the transaction:
- Increase HDSA ownership to an effective 35.4% (including the Toro Trust);
- Injection of R4 billion free cash to fund Northam’s growth strategy;
- Current value and growth potential of the company recognised and supported by anchor shareholders, the Public Investment Corporation (PIC) and Coronation Asset Management (Pty) Ltd (Coronation);
- Resolves uncertainty relating to BEE and future fund-raising, so that Northam is well-positioned to deliver growth and value to a broad range of stakeholders;
- 10-year security of HDSA ownership, ensuring that Northam exceeds the minimum Mining Charter equity requirements, and is well-positioned in the sector as a potential HDSA partner for further transactions. The transaction has the support of the Department of Mineral Resources (DMR);
- Immediate economic value transfer to broad-based HDSA participants, including employees and communities, as well as a range of strategic HDSA partners;
- All funding for the transaction is fully-secured through support of major shareholders; and
- Northam shareholders will have the right to participate in the transaction funding on a pro rata
“This landmark transaction recognises the fundamental value of the company and its growth potential. We expect to realise further upside, armed with a powerful balance sheet and with substantial and meaningful empowerment participation. Northam is well-positioned as a fully-integrated, fully-empowered South African mine-to-market PGM producer. The transaction effectively catapults Northam into the ‘1st division’ and, importantly, all stakeholders will share in the benefits of the business,” says Northam CEO, Paul Dunne.