Northam Platinum sells its entire minority stake in Implats for R3.1bn

Northam Platinum has cashed out R3.1bn in total after offloading its entire 3.3% stake in bigger rival Impala Platinum (Implats) in a transaction that aims fortify its balance sheet against the uncertain outlook in the platinum group metals (PGM) market.

The shares were sold at the volume weighed average price of R103.95 per Implats share.

The shares of PGM producers came off aggressively earlier in August before stabilising over the past week. Implats’ shares closed 5.24% higher at R102.95 on Monday, but are still down a hefty 20% month-to-date, according to Infront data.

Implats and the broader resource market suffered collateral damage earlier in the month as investors worried about the economic slowdown in China, which is SA’s largest trading partner and traditionally the biggest consumer of raw materials.

Northam has already received R9bn in cash after selling its 34.5% interest in RBPlat. The windfall enabled the mid-tier PGM player to declare its first dividend in a decade and announce a share buyback.

Its shareholders are lining up to receive R2.4bn in dividends while the share buyback programme will be about R1bn. 

Northam and Implats were involved in a protracted tussle to acquire RBPlat before the former dropped out of the race earlier this year, citing the drop in PGM prices. Led by CEO Paul Dunne, Northam was also under pressure from shareholders who argued at the time that its production pipeline looked more favourable relative its peers.

It has in recent years invested in beefing up production at its Zondereinde deep-level mine near Thabazimbi, its Booysendal mine near Steelpoort, and the Eland mine close to Brits.

For Implats, the consummation of the tie-up with its rival was long in the making. CEO Nico Muller previously tried unsuccessfully to acquire highly rated and cost competitive assets.

RBPlat will delist from the JSE in mid-September after its shares were suspended following the conclusion of the deal.

Its CEO Steve Phiri will officially vacate his position by the end of the week after more than a decade at the helm of the BEE outfit.

RBPlat was initially formed out of a 50/50 joint venture (JV) between Anglo American Platinum and Royal Bafokeng through its subsidiary Royal Bafokeng Resources in 2002.

The JV later became known as Bafokeng Rasimone Platinum Mine and was restructured in 2009, paving the way for RBPlat when it gained majority control of the JV.

mahlangua@businesslive.co.za