Northam Platinum plans to sell its 34.5% stake in Royal Bafokeng Platinum (RBPlat) for R9 billion to rival Impala Platinum due to a decrease in platinum group metals prices, which led to adverse market developments.
- Northam had previously been a contender in the takeover bid of RBPlat that was won by Impala Platinum.
- The prevailing platinum group metals market conditions and the material decline in the platinum group metals basket price have signaled a potentially protracted cyclical downturn.
- Equity valuations across the entire platinum group metals sector have declined substantially due to adverse market developments.
- The sale presents Northam with an opportunity to significantly strengthen its balance sheet and liquidity position, which in turn provides additional flexibility and optionality for Northam, subject to the relevant regulatory requirements and approvals necessary.
- Implats’ mandatory offer presents a unique and attractive opportunity for Northam to lock in substantial value in relation to the disposal shares, with strong cash underpin that has not been adversely affected by the steep decline in platinum group metals equity valuations across the sector.
- Northam’s growth strategy initiated in 2015 remains on track, and it is pleased with the operational performance and contribution of all its assets.
- The sale is subject to the relevant regulatory requirements and approvals necessary.