AngloGold Ashanti Moves Primary Listing to New York Stock Exchange

Anglo Gold Ashanti (GSE: BUT, GSE:AADS) has unveiled a major corporate restructuring that will see it move the primary listing of its shares from Johannesburg to New York and locate the company in London. The headquarters in Johannesburg will be retained.

Alberto Calderon, CEO of AngloGold Ashanti, said a primary listing on the New York Stock Exchange would help improve his company’s liquidity and the rating of its shares. AngloGold estimates it is currently trading at a 25% discount to rivals.

A secondary listing would be maintained on both the JSE and Ghana Stock Exchange, but the company would delist from the Australian Stock Exchange.

The changes announced today complement work already underway to lower our cost of capital, improve our cost competitiveness relative to our peers and optimize our portfolio by providing enhanced access to the world’s largest capital markets and pool of gold investors. offer, Calderon said.

AngloGold has no assets in South Africa after selling Mponeng to Harmony Gold for $300 million in 2020. Two years earlier, it had sold Moab Khotsong, also to Harmony. The company’s plans for the primary listing have been a continued demand from shareholders following the sale of the assets, Calderon said.

A primary listing in the US is expected to create improved access to the world’s largest sources of capital, including the ability to improve stock trading liquidity, the company said.

Trading in the New York ADR program generates two-thirds of daily liquidity, even though US investors make up 35% of the share register.

The transaction will cost AngloGold approximately $500 million, which is the amount of a 5% withholding tax payable as a result of the creation of the London residence. As there is a tax treaty with the UK, South African shareholders will not pay withholding tax; the move will also not affect the proportion of offshore shares that South African investors are allowed to hold.

But the restructuring will inevitably reflect badly on South Africa as an investment destination, especially after events yesterday in which the US ambassador alleged that the country had supplied arms to Russia.

The political crisis, coupled with growing fears about the government’s ability to handle power shortages, fueled a massive sell-off in the rand on Thursday. It slipped to R19 per dollar for the first time since the COVID-19 lockdown in 2020.

Calderon said the restructuring was part of his efforts to improve the company’s competitiveness, in which the Colombian has also vowed to reduce AngloGolds’ operating costs. This is not about South Africa, he said. I cannot comment on internal politics [of South Africa]but we are proud of our heritage and our people.

In terms of the Johannesburg office, which employs about 280 people, AngloGold said there would be no impact on employment; no local board changes were planned either. The company employs about 30,000 people worldwide.

AngloGold explored a change in primary listing and residency in 2018 led by former CEO Kelvin Dushnisky. While no formal application was filed, speculation about AngloGold’s plans angered the South African government, which threatened sanctions.

In contrast, the plans announced today have the approval of the South African Reserve Bank. Calderon said it was recognized during talks with South African authorities that there is a time to invest and a time to divest.

Shareholders would have to vote on the proposal. A supermajority of 75 percent is required, Calderon said. He declined to comment on the opinion of the South African government-owned Public Investment Corporation, which owns 15.7% of AngloGold. We have been in touch with a significant portion of our shareholders, he said.

The transaction was expected to be completed in September.