South Africa’s Public Investment Corporation (PIC) is reportedly pushing for Anglo American to unbundle its South African assets into a new ‘national champion’ type entity.

According to reports, including from the Times in London, the state-owned investment entity has accumulated a 13% stake in the company and is calling for change.

Anglo is already conducting a major restructuring which includes focusing on a core group of commodities and assets while offloading the rest. In SA, assets like Kumba iron ore and the coal business are on the block.

However, the PIC is said to be looking for Anglo to unbundle all of its SA assets. This would then also include its platinum business, which the company has previously earmarked as core. Anglo owns 80% of the JSE-listed Anglo American Platinum, the world’s largest producer.

Anglo’s board is said to be resisting given such a decision would result in the company being left with copper mines in Chile and the De Beers diamond business as its key assets.

On the back of the news, Shore Capital said: “We believe that the slow progress of the existing asset divestment programme (intended to reduce and improve Anglo American’s junk-rated debt) will add to pressure on Anglo American to do a deal.

“However, we suspect that Anglo American would only say yes if PIC comes up with an offer that Anglo American believes superior to any that might be received in a conventional competitive sales process.”

Anglo American shares were up 1.2% on Monday morning, outperforming rivals such as BHP Billiton, Rio Tinto and Glencore which were trading slightly down or flat on their respective Friday closes.


Created from www.mining-journal.com