South African mining company AngloGold Ashanti Ltd. (AU,AGD.L) Wednesday said it is restructuring and spinning off its international mining operations under a new UK holding company, Newco, and expects to raise $2.1 billion in a rights issue. The shares fell more than 7 percent in London.
The miner said it has received approval from the South African Reserve Bank, or SARB, to restructure its international assets, which is subject to approval of the shareholders.
The company intends to use the proceeds from the rights issue to pursue the restructuring. The firm has agreed that it will be debt free upon implementation of the restructuring in order to comply with the conditions of the SARB approval.
Chairman Sipho Pityana stated, "It has become increasingly clear that the two distinct parts of our portfolio require different strategies, focused management and should be appropriately capitalized to realise their full potential and unlock further value for shareholders."
AngloGold Ashanti intends to partially demerge 35 percent of Newco to its shareholders and would initially retain a 65 percent of controlling interest. Both companies will be renamed upon implementation of the restructuring.
Newco would hold AngloGold Ashanti's portfolio of gold production and exploration assets located outside South Africa. AngloGold Ashanti would continue to remain a South African domiciled business.
Srinivasan Venkatakrishnan will remain as CEO of AngloGold Ashanti and will continue to lead an executive team comprising incoming Chief Financial Officer, Christine Ramon, Chief Operating Officer Mike O'Hare and Italia Boninelli.
Newco will be led by CEO-designate Charles Carter, along with President and Chief Operating Officer Ron Largent, who will be joined on the executive team by Graham Ehm, Maria Sanz Perez and David Noko.
A new CFO will be recruited for Newco in due course, the company said.
The board of AngloGold Ashanti has concluded that current debt levels are too high and an equity capital raising, in the form of a rights issue to shareholders, is being contemplated.
AGD.L fell 7.08 percent to trade at 906.00 pence.
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