AngloGold Ashanti is exiting South Africa, moving its primary listing from Johannesburg to New York after nearly all of its shareholders voted in favour of the decision.
The gold producer, with operations in Ghana, Brazil, Guinea and Tanzania among others, cautioned earlier this month that basic earnings per share for the half year period to end June will be between 82% to 92% lower compared to the previous contrasting period. This translates to basic earnings per share of between 6 US$ cents (114 SA cents) and 13 US$ cents.
The company, which completed disposal of its South African assets in 2020, had also warned earlier of a corporate restructuring exercise. On Friday, shareholders voted for the migration of its primary listing from Johannesburg to New York.
“It is expected that all of the remaining Reorganisation Conditions will have been fulfilled (or waived) on or before Tuesday, 12 September 2023,” AngloGold Ashanti said in a JSE regulatory announcement on Friday.
Under the corporate restructuring, AngloGold Ashanti is also moving its headquarters from Johannesburg to London.
Analysts and observers said this was a landmark development that would leave a mark in South Africa’s corporate history although others said this was “always going to happen” as the company “no-longer had any assets” in the continent’s mining powerhouse.
“More than 98% of AngloGold shareholders approved the switch, exceeding the required majority of at least 75%,” said one analyst.
Shares in AngloGold Ashanti traded 2.6% weaker on the JSE on Friday although the company’s stock is 21.8% firmer in the year to date comparative, at R306.64.
Initially founded as Anglo Gold after the amalgamation of Anglo American’s gold interests and those of its associated companies in 1998, the company quickly amassed gold properties across many jurisdictions. These included properties in Australia, South America and elsewhere.
By 2004, Anglo Gold and Ashanti Goldfields had completed a merger that culminated in the creation of AngloGold Ashanti and in 2005, the merged entity signed a $700 million revolving credit facility before raising a further $500m in a an equity offering a year later.
However, a restructuring over the past few years culminated in the complete disposal of all its assets in the African country in 2020. It completed the sale of the Mponeng underground mine in September 2020 before it proceeded to dispose of the Sadiola mine in Mali in December that year.
“This change in domicile and listing structure is aligned with the transformation of AngloGold Ashanti’s asset base into a diversified global portfolio of high-quality producing assets and projects. The company has a long standing and growing presence in the US and no longer has operating assets in South Africa,” the company said earlier this year.
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” while the new set-up will help it built up “on a position of strength with the secondary listing” in the US.
“Despite US investors currently holding approximately 35% of the share register, a US primary listing is expected, in time, to facilitate greater performance and valuation comparisons with the AngloGold Ashanti Group’s more liquid and higher valued North American peers.”
Moreover, the company said, a corporate domicile in the UK “uses a well proven, low-risk and attractive jurisdiction for the AngloGold Ashanti Group and minimizes incremental costs” for shareholders.
While South Africa has been volatile, causing investor apprehension owing to a plethora of headwinds, AngloGold Ashanti believes that the “broader investment appeal and regulatory environment” in the US and UK will “enhance strategic and financing flexibility” with minimal disruption for shareholders and other stakeholders.
BUSINESS REPORT