ANGLO-AMERICAN Platinum Holdings (Amplats) will withhold paying out dividends to the new indigenous shareholders in Unki Platinum Mine and offset these against its cession of claims valued at US$142 million.
Report by Staff Writer
Unki shareholders sold claims to government worth US$142 million, but were never paid for them. The amount is also the same as the value of the 51% stake sold to indigenous investors.
Under the new arrangement, Amplats will withhold dividends and offset these against its cession of claims to government. It will simultaneously treat the money it is owed by government as a loan advanced to the indigenous owners. The loan will have a tenure of five years from the end of the notional vendor finance term or until the cession of claims loan has been repaid.
If the cession of claims loan has not been repaid within the five years, the residual shares will become callable by Amplats, with any outstanding amount in relation to the loan remaining payable by the government.
Last week, Unki complied with the country’s indigenisation requirements which saw the miner sell 51% equity to indigenous entities at a total price of US$142,8 million, which effectively values Unki at US$280 million.
The transaction value of the company was reached after deducting an indigenisation discount of US$312 million (53%) in recognition of the sovereign ownership of resources from the company’s value of US$592 million.
Unki Mine will issue 51% indigenisation shares (post issuance) to the Community Share Ownership Trust, Employee Share Ownership Trust, indigenous investors and the National Indigenisation and Economic Empowerment Fund (NIEEF) under a notional vendor finance loan totalling US$142,8 million.
The structure will see the empowerment entities appoint at least five board members as they are allowed to appoint a director for each complete 9% of the shares they hold.
Addressing media at the signing ceremony last week, Indigenisation minister Saviour Kasukuwere said he was happy with the transaction, which he admitted had taken long but had yielded the best result for the indigenous people.
Kasukuwere said the financing to the Community Share Ownership Trust, Employee Share Ownership Trust, Indigenous investors and NIEEF will be made available at an interest rate of 10 % per annum.
The vendor finance will be repaid through a waiver by the borrowers of their rights to receive future dividends to the extent of 85% of dividends paid by the company during the notional vendor finance (NVF) Term.
The Community Share Ownership Trust, Employee Share ownership Trust and indigenous investors will each purchase shares valued at US$60 million at a price of US$28 million to give a discount of US$32 million per investor.
NIEEF will purchase shares valued at US$126 million at a price of US$58,8 million, earning a discount of US$67 million.
In terms of the structure of the financing arrangement, the community share ownership scheme, employee share ownership trust and the strategic investors will cede and pledge all the shares issued to them until the NVF has been fully repaid.
However, for NIEEF, the shares will initially not be free of cession and pledge (i.e. the shares will be encumbered) but Amplats have indicated in future they would be happy to consider requests by NIEEF for relaxation of the restrictions on usage of the shares.