LONDON – AngloGold Ashanti, one of the world’s largest gold mining firms, said on Monday that it would abandon plans to spin off its international mining operations and raise $2.1 billion in new capital.
The company, based in Johannesburg, said last week that it was planning to spin off its operations outside of South Africa into a new entity to be listed in London. AngloGold Ashanti had also sought to raise new capital in order to reduce its debt ahead of the restructuring.
On Monday, the company said that a number of shareholders, although supportive of the strategic logic of the transaction, expressed concerns about several aspects of the deal, including the level of fund-raising needed for the restructuring to go forward.
“AngloGold Ashanti has, therefore, decided not to proceed with the restructuring and capital raising, as currently proposed,” the company said in a news release on Friday. “The company will continue to evaluate all options to address debt levels and unlock value, taking into account the feedback from its shareholders and its business needs.”
AngloGold Ashanti had hoped the separation would simplify its business and allow the management teams of the two companies to be more economically competitive. It has also hoped separate listings would allow the two entities to be more appropriately valued by investors.
The international operations accounted for about two-thirds of AngloGold’s production in 2013.
On a conference call with journalists, Srinivasan Venkatakrishnan, the AngloGold chief executive, said the company would consider assets sales among its options to reduce its debt, but suggested the company had time to consider several options.
“We don’t have a gun to head” in terms of any covenants on loans or loans maturing in the near future, he said.
Under regulatory rules, the company was required to announce the proposal before it could begin consulting with shareholders about its plans, he said.
“Reducing current high debt levels and improving overall financial flexibility remain priorities for AngloGold Ashanti, which will now intensify its focus on value creation opportunities deliverable within its current structure,” the company said.
AngloGold Ashanti has 20 gold mining operations in 10 countries. It produced about 4.1 million ounces of gold in 2013.