Tax deal enables Anglo to sell its Kumba stake
SARS penalty much smaller than anticipated as Anglo undertakes a major portfolio restructuring
Anglo American’s disposal of its stake in SA’s largest iron ore producer became easier on Friday, when Kumba Iron Ore agreed to a R2.5bn settlement with the South African Revenue Service (SARS) — a penalty much smaller than feared. Anglo is in the throes of a major portfolio restructuring as it sells off assets in bulk commodities to repay billions of dollars in debt and to focus the business on platinum, copper and diamonds. Among the assets up for sale are its 69.7% stake in the JSE-listed Kumba and its thermal coal mines that supply power utility Eskom. Kumba said on Friday that the last major issues were resolved with the taxman, with an agreement to make a full and final settlement payment to SARS by end-March 2017 for tax audits dating back to 2006. Analysts at JP Morgan said they estimated that Kumba had R4.8bn in cash on its books by December 2016 and that Anglo’s net debt was about $9.4bn at that time, so the "balance sheet implications are modest"."While we recognise the m...
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