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Investing.com -- Anglo American (JO:AGLJ) (LON:AAL) in a statement on Monday detailed its plan to spin off Anglo American Platinum, setting a June timeline for the demerger.
The move will see Anglo American Platinum, the world's leading producer of platinum group metals (PGMs), become a separately listed entity on the Johannesburg Stock Exchange with an additional listing on the London Stock Exchange (LON:LSEG), the miner said.
The decision to proceed with the demerger follows a comprehensive review of Anglo American’s portfolio, with the company seeking to streamline its operations and focus on its core assets.
As part of this transition, Anglo American plans to retain a 19.9% stake in the newly independent company, which it will gradually divest over time.
Ahead of the separation, Anglo American Platinum announced a final dividend for 2024 alongside an additional cash dividend of R17 billion (approximately $0.9 billion).
These payments will be distributed to existing shareholders, including Anglo American, which holds a 67% stake in the unit.
This will result in a capital return of approximately $0.6 billion to Anglo American, reinforcing its financial position as it restructures its portfolio.
“We are on a clear timeline towards demerging Anglo American Platinum - the world's leading PGMs producer - in June,” said Duncan Wanblad, chief executive of Anglo American in a statement.
The demerger process remains subject to shareholder approval, which will be sought at Anglo American’s Annual General Meeting scheduled for April 30.
The plan will also undergo regulatory scrutiny to ensure compliance with governance and listing requirements.
Once completed, Anglo American Platinum will be de-consolidated from its parent company, marking a significant shift in Anglo American’s corporate structure.
Financially, Anglo American Platinum reported an adjusted EBITDA of R19.8 billion ($1.1 billion) for 2024, reinforcing its stability as it moves toward independence.
The company's net cash position, including the declared dividends, stood at approximately $0.9 billion, further supporting its financial resilience post-demerger.
The restructuring aligns with Anglo American’s broader strategy to optimize its asset base, which includes the planned sale of its steelmaking coal and nickel businesses as well as the potential separation of De Beers, its iconic diamond division.
The shift reflects the company’s focus on resource assets with high long-term growth potential, particularly in copper and crop nutrients.
As the June timeline approaches, Anglo American is working closely with shareholders and regulatory bodies to ensure a smooth transition.
The company has stated that it will not retain board representation in Anglo American Platinum following the demerger, signaling a clean break in governance while maintaining an orderly reduction of its residual stake.
RBC Capital Markets in a note said that the demerger of Anglo American and Anglo Platinum was not as clean a break as expected, with Anglo American intending to retain a 19.9% stake in the company and eventually divest it responsibly over time.