AngloGold Ashanti Limited (ADR) (NYSE:AU) decided to cancel its plan to spin off its international mining operations and to raise $2 billion in new capital.
The company emphasized that it engaged extensively with shareholders to solicit feedback regarding its proposed corporate restructuring and capital raising.
AngloGold Ashanti Limited (ADR) (NYSE:AU) said its proposed restructuring would create an entity listed in London Stock Exchange, which will be composed of its international assets. The restructuring will create two simpler and more focused companies.
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A number of shareholders expressed concern
According to the company, there had been broad support for the restructuring, but a number of shareholders expressed concern regarding certain aspects of the proposed transactions.
The shareholders were concerned about the quantum of the equity capital raising needed to implement the restructuring in compliance with regulatory and other requirements. Given the concerns raised by shareholders, AngloGold Ashanti Limited (ADR) (NYSE:AU) abandoned its plan.
Hedge fund manager John Paulson was among those who opposed the spin off and share sale plan of the company because he believed that it would destroy shareholder value.
AngloGold Ashanti will continue to evaluate options
AngloGold Ashanti Limited (ADR) (NYSE:AU) said it would continue to evaluate options to address its debt levels and unlock value while considering its business needs and shareholder’s feedback.
The company emphasized that improving its overall financial flexibility and reducing its current high debt levels remain its priorities. AngloGold Ashanti Limited (ADR) (NYSE:AU) said it would intensify its focus on value creation, identify and implement further operational efficiencies, reduce overhead structures and pursue other initiatives to boost its underlying performance.
In addition, the company intends to accelerate actions to strengthen its balance including debt reduction, portfolio simplification and options to unlock value from its Colombian portfolio.
During a conference call, AngloGold CEO Srinivasan Venkatakrishnan said the company is considering asset sales as an option to reduce debt. He indicated that they had several options to consider.
“We don’t have a gun to our head” said Venkatakrishnan regarding the terms of agreements on loans or debts maturing in the near future.
AngloGold Ashanti Limited (ADR) (NYSE:AU) is the third-largest gold producer worldwide in terms of volume. The South African mining company operates 20 gold mines in ten countries. Last year, the company produced 4.1 million ounces of gold.