AngloGold Ashanti is walking the footsteps of BHP, with the company spinning out all of its non-South African assets into a new company.
It will also carry out a massive US$2.1 billion rights issue.
The company will restructure its international mining operations – anything not located in South Africa – into a new UK Holdings company.
The new company will seek a listing on the London Stock Exchange and the NYSE.
“The intention is that Newco would hold AngolGold Ashanti’s portfolio of gold production and exploration assets located outside South Africa,” the miner said in a company statement.
“AngloGold Ashanti would continue to remain a South African domiciled business that would focus on maximising the value of its current portfolio and, over time, the intention is that it would consider developing a multi-commodity growth strategy in South Africa and beyond.”
It will partially demerge 35 per cent of the new entity to its shareholders, while AngolGold retains the remaining 65 per cent.
The miner explained that separation into two vehicles will allow for independent management teams to carry out distinct strategies to compete effectively in the current context of the industry and macro-economic environment.
Upon implementation of the restricting both companies will change their names.
Commenting on the move, AngloGold Ashanti chairman Sipho Pityana said “it has become increasingly clear that the two distinct parts of our portfolio require different strategies, focused management, and should be appropriately capitalised to realise their full potential”.
“In South Africa we will create a standard bearer for the mining industry with a structure allowing it to chart an exciting growth trajectory while allowing investors to properly value its high quality, cash generative portfolio.”
AngolGold’s board will continue to be chaired by Pityana, and the existing board will remain, apart from Michael Kirkwood and David Hodgson who will resign to join the new company board at the time of its establishment.
Kirkwood will chair the newly listed entity, while Charles Carter will take the position of CEO while Ron Largent will become COO.
The miner is aiming to carry out the restructure next year.
AngloGold is also aiming at a massive US$2.1 billion rights issue.
The proceeds will be used predominately to pay down debt by redeeming the miner’s outstanding bonds.
However it noted that “the completion of the proposed rights issue cannot be assured as a fundraising of this scale will require shareholder approval and an increase in authorised share capital”.