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AngloGold Ashanti Shifts Focus to UK and US Opportunities Exits SA

Published

9 months ago

August 21, 2023

The proposed reorganisation also includes the relocation of AngloGold’s headquarters to London from Johannesburg.

AngloGold Ashanti, a prominent gold producer, is moving significantly by exiting South Africa and shifting its primary listing from Johannesburg to New York. The decision received overwhelming support from the majority of the company’s shareholders as reported by DFA.

The company, which operates in various countries, including Ghana, Brazil, Guinea, and Tanzania, recently cautioned about a substantial drop in basic earnings per share for the first half of the year, estimating a decline of 82% to 92%. This corresponds to a range of 6 US cents (equivalent to 114 SA cents) to 13 US cents.

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AngloGold Ashanti concluded the sale of its South African assets in 2020, and it had earlier signalled an upcoming corporate restructuring. In line with this, shareholders have voted to migrate its primary listing from Johannesburg to New York. The company anticipates fulfilling all remaining Reorganisation Conditions by September 12, 2023, according to a regulatory announcement on the Johannesburg Stock Exchange (JSE).

AngloGold Ashanti is also relocating its headquarters from Johannesburg to London as part of the corporate restructuring.

Analysts and observers view this move as a landmark development with implications for South Africa’s corporate landscape. Some have asserted that this transition was inevitable, given that the company no longer holds significant assets in the country’s mining sector.

An analyst stated that over 98% of AngloGold shareholders supported this switch, surpassing the minimum required majority of 75%. Despite this move, the company’s shares on the JSE experienced a 2.6% decline, yet its stock has demonstrated a year-to-date increase of 21.8% at R306.64.

Established as Anglo Gold following the amalgamation of gold interests from Anglo American and associated companies in 1998, the company rapidly acquired gold properties across various regions, including Australia and South America.

In 2004, a merger between Anglo Gold and Ashanti Goldfields gave rise to AngloGold Ashanti. By 2005, the merged entity secured a $700 million revolving credit facility and raised an additional $500 million through an equity offering.

Over recent years, the company’s transformation journey culminated in the complete divestment of its assets in South Africa in 2020. It sold the Mponeng underground mine in September and disposed of the Sadiola mine in Mali by December.

AngloGold Ashanti attributes this change in domicile and listing structure to its evolving asset portfolio, emphasising creating a diversified global collection of high-quality producing assets and projects. The company no longer maintains operational assets in South Africa and has established a robust presence in the United States.

The primary listing in the US is expected to grant the company access to extensive pools of capital, enhancing share trading liquidity. This strategic move will also bolster the company’s position with a secondary listing in the US.

Furthermore, the transition aligns with AngloGold Ashanti’s aim to foster better performance and valuation comparisons with its more liquid and higher-valued North American counterparts.

The company also recognises the benefits of establishing a corporate domicile in the UK, citing its well-proven, low-risk, and attractive jurisdiction that minimises incremental costs for shareholders.

In light of South Africa’s economic volatility and investor concerns stemming from various challenges, AngloGold Ashanti believes that the US and UK investment environments will provide a broader appeal and regulatory framework, ultimately enhancing strategic and financial flexibility with minimal disruption to shareholders and stakeholders.