AngloGold Ashanti to restructure BEE transactions

AngloGold Ashanti, the National Union of Mineworkers (NUM), Solidarity, UASA – The Union (UASA), Izingwe Holdings and the Bokamoso ESOP board of trustees on Thursday announced agreements between them on the restructuringmachine sous gratuit sans tlchargement of the empowerment transactions concluded respectively between AngloGold and the unions, and between AngloGold and Izingwe in 2006.

Anglo said the new arrangements followed a period of consultation between the parties which began late last year. "The interactions were motivated by the fact that share price performance since the onset of the 2008 global financial crisis led to a situation where the first two tranches of E shares, which operate essentially as share appreciation rights, vested and lapsed at no additional value to Bokamoso ESOP beneficiaries and Izingwe," the company said.

"Ordinarily, this would be accepted as a normal risk of share ownership. However, AngloGold Ashanti takes the view that the empowerment transactions were designed to enable AngloGold Ashanti to further play its part in ameliorating SA’s historical legacy."

AngloGold Ashanti CEO Mark Cutifani said, "We’ve taken a proactive stance, in partnership with Izingwe and our employees, to ensure this economic empowerment initiative has the intended benefit. We believe this has been achieved at a very reasonable cost to shareholders, while delivering clear upside for AngloGold Ashanti, its employees and South Africa as a whole.”

Izingwe Holdings chairman Sipho Pityana added, “Our common commitment to create an inclusive economic dispensation, by redressing the unfair discrimination of the past, resonates powerfully when major players in the economy, of the kind AngloGold Ashanti is, take decisive steps to ensure the success of the black economic empowerment project. The fact that this was done without pressure from government is positive commentary on AGA and its leadership”

AngloGold said it's board had seen it appropriate that, as far as possible the E shares, on vesting, should see the transfer of an element of value. ESOP beneficiaries also benefited from ownership of ordinary shares transferred at no cost. This aspect of the ESOP would therefore be unaffected by the restructuring transaction. The company said in order to remedy the previous situation in a manner that would ensure an element of value accruing to all participants, though at a reasonable incremental cost to AngloGold Ashanti shareholders, the following had been concluded:

• Lapsed loan shares that vested without value will be reinstated

• The strike (base) price will be fixed at R320 per share for the Bokamoso ESOP and R330 for Izingwe

• The notional interest charge will fall away

• As previously, 50% of any dividends declared will be used to reduce the strike price

• As previously, the remaining 50% is paid directly to participants under the empowerment transaction

• The life span of the scheme will be extended by an additional one year, the last vesting being in 2014, instead of 2013. A minimum payout on vesting of the E shares has been set at R40 each and a maximum payout of R70 each per E Share for Izingwe and R90 each for members of the Bokamoso ESOP (ie employees), plus the impact of the 50% of dividend flow.

May Hermanus, who chairs the Bokamoso ESOP board of trustees, speaking also on behalf of union nominees on the board, said: “The absence of value flowing to members on vesting dates in respect of the E shares was worrying to trustees and members of the scheme. We therefore welcome the constructive and creative thinking that has gone into remedying this problem for ESOP members”