Attention is drawn to the announcement dated 27 March 2013, in which Atlatsa Resources Corporation (formerly known as Anooraq Resources Corporation) (“Atlatsa”) (TSXV: ATL NYSE MKT: ATL JSE: ATL) announced that Anglo American Platinum Limited (“Anglo American Platinum”), Atlatsa and Atlatsa Holdings Proprietary Limited (formerly known as Pelawan Investments, the controlling Black Economic Empowerment (“BEE”) shareholder) (“Atlatsa Holdings”) (collectively, “the Parties”) have concluded binding agreements for the revised restructure, recapitalisation and refinancing of Atlatsa and the Bokoni group of companies (“Bokoni Group”) (“the Transaction”).
As at 31 December 2012, Atlatsa owed approximately R3.3 billion to Anglo American Platinum, which debt, in the current market environment, was unlikely to be repaid by Atlatsa in the medium term. In terms of the Transaction, Anglo American Platinum will acquire, from Atlatsa, the eastern section of Ga-Phasha (contiguous to Anglo American Platinum’s Twickenham mine) and the Boikgantsho project (contiguous to Anglo American Platinum’s Mogalakwena mine) for R1.7 billion, which proceeds will be fully utilised by Atlatsa to reduce the existing debt owing to Anglo American Platinum. In addition, Anglo American Platinum will subscribe for 125 million new common shares in Atlatsa for an aggregate subscription price of R750 million, all proceeds of which will be used by Atlatsa to further reduce the existing debt owing to Anglo American Platinum. After taking the above transactions into account, Atlatsa’s remaining debt owing to Anglo American Platinum will be approximately R830 million.
Anglo American Platinum will provide Atlatsa with an additional debt facility of approximately R720 million, taking the total debt facility up to a limit of R1.55 billion (“Debt Facility”). The Debt Facility will attract a facilitative variable interest rate and is repayable between 2018 and 2020. Anglo American Platinum will also provide a R90 million working capital facility to Atlatsa, repayable in full by 31 December 2018. Atlatsa will not pay any dividends until the working capital facility is fully repaid.
The Bokoni Platinum Mine (owned 51 as to Atlatsa and 49 as to Anglo American Platinum) will be expanded to increase its mining operations from 100,000 tonnes per month (current) to 160,000 tonnes per month, at a total anticipated capital cost of R1.1 billion, to fill the existing concentrator to its capacity. Atlatsa will be able to utilise the available credit under the Debt Facility to finance its attributable portion of the Bokoni Platinum Mine expansion project costs.
The Parties have also agreed to simplify the Atlatsa capital structure through unwinding the current “B” preference share arrangement, such that Atlatsa will have one class of common shares going forward. Anglo American Platinum will sell 115,8 million Atlatsa common shares, arising from the unwind of the “B” preference shares, to Atlatsa Holdings for R463 million, on loan account, on terms mirroring the Debt Facility owing to Anglo American Platinum. This will increase the BEE shareholding of Atlatsa Holdings in Atlatsa from 51 to 62 Following the Transaction, Anglo American Platinum will retain a 22.6 ordinary equity interest in Atlatsa. Furthermore, its equity interest in Bokoni Platinum Mine will remain at 49.
“On implementation of the Transaction, Atlatsa and the Bokoni Group will be well positioned to implement its business strategy on a more conservative, lower risk and sustainable basis. The acquisition of the eastern section of Ga-Phasha and the Boikgantsho project provides Anglo American Platinum with access to mineral properties that provide synergies with its operations at Mogalakwena and Twickenham” said Chris Griffith, Chief Executive Officer of Anglo American Platinum.
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