JOHANNESBURG – Anglo American Platinum (Amplats) is set to transfer R2 billion of share value to its labour-sourcing communities a year earlier than expected thanks to the strong performance of its shares.
The JSE-listed platinum group metals (PGM) giant said the money was a settlement to Alchemy, its community share scheme that was established in December 2011.
Alchemy was established to provide Amplats’ labour-sourcing communities with equity ownership in the company through regional development trusts.
Amplats said the trusts would focus on advancing broad-based community development, including infrastructure, education and healthcare, as well as improving livelihoods.
Amplats chief executive Natascha Viljoen said Alchemy had delivered on its objective of creating sustainable shared value to the group’s host communities and where its employees originate in the Eastern Cape and North West and Southern African Development Community countries.
“Anglo American Platinum is playing a responsible role by catalysing development in our communities,” Viljoen said. “Through our established governance structures, we will work with the development trusts to ensure the careful deployment of this capital so that it can further advance our efforts to deliver shared value and build thriving communities.”
Amplats issued 6.3 million shares, at 10 cents per share, to the Lefa Le Rona Trust (LLRT), the umbrella trust acting on behalf of the regional development trusts, representing 2.33 percent of the total issued share capital.
The LLRT has paid R300 million in dividends to date.
Amplats said the transaction structure provided for the early settlement of the notional vendor finance (NVF) when its volume-weighted average price reached a trigger price.
“The trigger event occurred on July 27, 2020 and will result in the company repurchasing 4 889 680 shares from LLRT, not from the market, on September 22, 2020, at par value of 10 cents per share, to settle the NVF. The vesting results in an immaterial cash flow impact for the company,” Amplats said. The LLRT will have more than 1.4 million unencumbered Amplats shares with a vesting value of R2bn at the date of the trigger event.
Amplats shares have soared by 56.08 percent in the past year on the back of strong metal prices. The PGM rand basket price jumped 80 percent to R32 166 during the six months to June on strong rhodium and palladium prices, helping to boost producers.
Amplats said that after the Alchemy Scheme period in December 2021, 40 percent of the shares could be distributed to the development trusts based on their proportional interest held, and they were entitled to monetise this investment. The remaining 60 percent of the shares held by the LLRT were subject to a 20-year lock-in period, to the end of December 2041.
Amplats shares closed 3.52 percent higher at R1 232.76 on the JSE on Tuesday.