AngloGold Ashanti to Raise $2.4bn from Share and Bond Issue

Strategic Insights -

AngloGold Ashanti is set to raise significant funds from a share and bond issue to buy out its hedge book worth approximately $2.4 billion. The company plans to issue shares worth around $686 million, with an option to exercise an overallotment option, which could add a further $103 million. Mandatory convertible bonds will also be issued, worth $686 million, with the potential to add an additional $100 million if the overallotment option is exercised. AngloGold Ashanti aims to raise the remaining balance from cash and internal resources.

Key Takeaways:

  • AngloGold Ashanti plans to raise $2.4 billion from a share and bond issue to buy out its hedge book worth $2.4 billion.
  • The company will issue shares worth around $686 million, with an option to exercise an overallotment option worth an additional $103 million.
  • Mandatory convertible bonds worth $686 million will be issued, with the potential to add an additional $100 million if the overallotment option is exercised.
  • AngloGold Ashanti aims to raise the remaining balance from cash and internal resources.
  • The company has shareholder approval for the issuing of shares, but needs support for the bond issue.
  • AngloGold Ashanti's largest shareholders, Paulson and Allan Gray, are understood to be backing the bond issue.
  • The company has a project pipeline worth $2.5 billion, which will be funded from cash flow and current facilities.
  • AngloGold Ashanti CEO Mark Cutifani stated that the company has a strong view on the gold price, citing supply side constraints and currency fluctuations as positive fundamentals.
  • The company's hedge book stands at 2.7 million ounces, valued at between $2.4 billion and $2.5 billion.
  • Removing the hedge book is expected to improve profit margins and cash flow, and enhance the company's ability to fund its project pipeline.

Statistics:

  • AngloGold Ashanti's hedge book is worth approximately $2.4 billion to $2.5 billion.
  • The company plans to raise $686 million from the share issue.
  • The mandatory convertible bonds will be worth $686 million.
  • The overallotment option for the bond issue could add an additional $200 million ($103 million for the share issue and $100 million for the bond issue).
  • AngloGold Ashanti's project pipeline is worth $2.5 billion.
  • The company's cash flow and current facilities will be used to fund its project pipeline.

Sources:

  • Business Day
  • AllAfrica Global Media
  • AllAfrica.com