JOHANNESBURG (Reuters) - AngloGold Ashanti Ltd (ANGJ.J), the world's third-largest gold miner, plans to offer up to 18.1 million shares and issue convertible bonds to cut its gold hedge and benefit from the spot gold price.
AngloGold has chipped away at its hedge book -- one of the biggest among its global peers -- to increase its exposure to the spot price of gold and take advantage of the gold price rally like its rivals.
"Removing the hedge book represents the last phase of the balance sheet restructuring and once completed, is expected to give us full exposure to the gold price, widening profit margins and improving cash flow," Chief Executive Mark Cutifani said.
AngloGold said it would offer up to 15.8 million new ordinary shares and up to an additional of 2.4 million new ordinary shares through over-allotment.
It also plans to offer mandatory convertible subordinated bonds due 2013 which will convert into 15.8 million American Depositary Shares (ADS) and an additional 2.4 million ADSs via an over-allotment option.
The final price of both offerings will be announced after the completion of the bookbuilding process.
AngloGold has cut its hedge book -- gold sold forward or covered by derivatives -- to 2.72 million ounces by Sept. 14 and plans to eliminate all of it by early next year, also by procuring early settlements of all existing contracts that mature beyond 2010.
AngloGold said this would allow it to be fully exposed from 2011 to the spot price of gold and expects to realise higher profit margins and cash flows from 2011 as a result of the low committed prices under existing contracts that would be removed.
The company said outlook for the price of bullion remained robust, supported by strong physical and investment demand and diminishing supply of gold mines globally. (Reporting by Agnieszka Flak; Editing by Matthew Tostevin)
No comments:
Post a Comment