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Northam buys R1bn of Zambezi preference shares from the PIC

30th August 2019

By: Tasneem Bulbulia

Deputy Editor Online

     

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Northam Platinum has acquired 13.7-million Zambezi preference shares from the Public Investment Corporation (PIC), taking its holding of preference shares to 19.41-million shares, representing 12.1% of all Zambezi preference shares in issue.

Northam acquired the shares for nearly R1.01-billion in cash.

The acquisition will be funded from Northam’s cash reserves.

The company indicated that this would be beneficial to Northam shareholders in that the transaction would reduce the preference share dividend expense and liability included in Northam’s consolidated financial statements.

It will also reduce Northam’s potential financial exposure under the guarantee it provided to holders of Zambezi preference shares, should the guarantee be called upon; and should Zambezi elect to redeem the Zambezi preference shares through a distribution of ordinary shares in Northam held by Zambezi, then the redemption of the Zambezi preference shares held by Northam will result in reducing the number of Northam shares in issue.

“Zambezi’s structure presents a very compelling and powerful way for Northam to return value to shareholders through the purchase of the Zambezi preference shares,” Northam CEO Paul Dunne commented in a statement on Friday.

Edited by Chanel de Bruyn
Creamer Media Online Managing Editor

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