The purchase by black-empowered Afripalm of a stake in Mvelaphanda Resources has injected new transaction clout into the company, which has been deal starved for more than two years.
With a R1,1-billion cash injection, a boosting of its empowerment credentials to more than 50% and a potential platinum transaction already on the horizon, Mvela, currently an investment company, could get the operator status it seeks to reduce the discount to net asset value at which it trades.
The last deal it successfully completed was its acquisition of a 15% effective stake in Gold Fields’ South African assets in 2004.
According to Lazarus Zim, former chief executive of Anglo South Africa and current Afripalm chief executive, the deal gives his company a head start into the empowerment investment market by accessing Mvela’s eight-year track record of investments in diamonds, gold and platinum.
Afripalm says it aims to be a significant player in Anglo Platinum’s black economic empowerment transaction and will offer all mining-related transactions to Mvela under the terms of Thursday’s deal.
Anglo American chief executive Tony Trahar said recently that he expected all of Anglo American’s assets to be empowered in 2007.
“Our eye is currently on the platinum ball and, in addition, there is a whole range of other projects that are in the pipeline,” said Zim in an interview.
Pine Pienaar, Mvela’s chief executive, said he expects a deal to unfold early next year. “Constructive discussions are in progress. If we are successful in all aspects of the transaction then, I believe it will give us a controlling stake in Northam.”
Anglo Platinum, which is busy finalising its empowerment structures, owns 22,5% of Northam, and sold Mvela its 21,9% stake earlier in the decade.
“The speculation of how the transaction is done and what else [is involved] is for another day,” said Pienaar. “That is Anglo’s day; today is Lazarus’s day.”
Mvelaphanda Resources is also in a joint venture with Anglo Platinum on the Booysendal platinum project, and has previously announced plans to inject its share into Northam to boost its stake to 34%. — I-Net Bridge