Platinum group metals miner Impala Platinum (Implats) plans to repurchase 16.23-million treasury shares from its subsidiary, Gazelle Platinum, as part of its plans to develop an enhanced capital structure.
While this is a noncash transaction for Implats, to effect this, Implats subsidiaries Impala Platinum Limited and Gazelle Platinum have entered into a repurchase agreement dated August 26 in terms of which Implats will repurchase the ordinary shares currently held by Gazelle.
Implats’ board has also approved the cancellation of treasury shares, which are currently held by a subsidiary of the group.
The specific repurchase represents 2.03% of the current ordinary shares in issue.
As certain shareholder approvals are required to effect the specific repurchase, full details of the specific repurchase will be incorporated in the notice of annual general meeting (AGM) which is expected to be distributed to shareholders on or about September 14, and will include a special resolution relating to the specific repurchase.
The AGM is scheduled to be held on October 14.
Implats notes that the ordinary shares to be repurchased in terms of the specific repurchase are reflected as treasury shares in the consolidated yearly financial statements of Implats. Subsequent to the specific repurchase, application will be made to the JSE for the cancellation and delisting of those ordinary shares.
After the specific repurchase, there will be 4.61-million treasury shares in issue which are held in terms of Implats' long-term incentive plan.
The miner states that it also seeks to create value by sustaining and leveraging a strong and flexible balance sheet within a prudent capital allocation framework.
During the 2020 financial year, Implats notes, substantial progress had been made in this regard through the induced conversion of the $250-million bond and the funding of the acquisition of Impala Canada through a combination of cash and debt.
In addition, the group implemented a revised dividend policy based on a declaration of at least 30% of free cash flow, pre-growth capital, for any given period, subject to the discretion of the board of directors of Implats.