Northam Platinum has sold its entire 3.3% stake in larger rival Impala Platinum (Implats), generating a total cash inflow of R3.1bn.
Key points:
- The transaction aims to strengthen Northam Platinum’s balance sheet in the face of the uncertain outlook in the platinum group metals (PGM) market.
- The shares were sold at the volume-weighted average price of R103.95 per Implats share.
- PGM producers, including Implats, experienced a significant decline in share prices earlier in August, mainly due to concerns over China’s economic slowdown and its impact on the demand for raw materials.
- Northam Platinum had previously received R9bn in cash from the sale of its 34.5% interest in RBPlat, enabling the company to declare its first dividend in a decade and initiate a share buyback program.
- Shareholders of Northam Platinum are set to receive R2.4bn in dividends, while the share buyback program will amount to approximately R1bn.
- Northam Platinum and Implats were engaged in a prolonged battle to acquire RBPlat, but Northam eventually withdrew from the race due to declining PGM prices. Northam has focused on expanding production at its Zondereinde, Booysendal, and Eland mines.
RBPlat, formed as a joint venture between Anglo American Platinum and Royal Bafokeng Resources, will delist from the JSE after the completion of the deal. CEO Steve Phiri will step down from his position at RBPlat, marking the end of his decade-long tenure at the company. The tie-up between Northam Platinum and Implats represents a significant development for both companies, with Implats aiming to acquire competitive assets to further strengthen its position in the market.