AngloGold Ashanti said on Tuesday that it expected to raise about $495m from selling new shares as mining group Anglo American cedes control of the South African gold mining company.
Anglo American is giving up direct control of AngloGold by reducing its holding in the subsidiary from 51 per cent to about 41 per cent through a $1bn share offering. It announced plans to make AngloGold independent last October as part of a strategic review of its operations.
AngloGold said on Tuesday that the net proceeds from its sale of new shares were expected to be about $495m after $16m of underwriting costs and issue expenses. The company is offering 9.97m shares, and Anglo South Africa Capital, a wholly-owned subsidiary of Anglo American, is offering 16.3m shares.
The combined offering will close on April 20. The stock is being offered as ordinary shares or in the form of AngloGold Ashanti American Depositary Shares (ADS’s). It is priced at $51.25 per ADS and R315 per share.
AngloGold said last month that it intended to use the proceeds of the offering for “project development, capital expenditure and other general corporate purposes”.
Bobby Godsell, AngloGold’s chief executive, said in a recent interview with the Financial Times that he expected the company to be “more fleet of foot” in making decisions on mergers and acquisitions after Anglo American gives up control.
There has been speculation that AngloGold could buy South Africa’s Gold Fields, which would make it the world’s largest gold company.
AngloGold shares rose as high as 2.2 per cent to R322 in early Johannesburg trade.
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