By Nelson Banya
(Reuters) -South Africa’s Public Investment Corporation (PIC) will soon announce whether it will back one of the two companies that have vied for over a year to acquire platinum group metals (PGM) producer Royal Bafokeng Platinum, Implats CEO said on Thursday.
PIC, a state-run asset manager, is the biggest shareholder in both Impala Platinum (Implats) and Northam Platinum, which have been in a bidding war for the mid-tier company since November 2021.
It owns 20.01% of Impala, 17.15% of Northam and 9.42% of RBPlats, making it a potential kingmaker in the transaction, should it support either bid.
Impala has built up a 40.71% shareholding in RBPlat, while Northam has a 34.52% share in the takeover target, which is coveted for its large, shallow, high-quality assets. RBPlat produced 467,000 platinum group metal (PGM) ounces in 2021.
Impala Chief Executive Officer Nico Muller expressed frustration at the drawn-out transaction, saying “the uncertainty is not constructive for any party”.
“It is important for us to stress the importance of driving this process to a closure. We have had a firm undertaking from PIC that they will, in the next few weeks, make a decision one way or another,” Muller told a results briefing.
The PIC said it would not comment on Muller’s remarks, citing “price sensitivity”.
“However, the PIC supports any transaction that can demonstrate benefits for its clients, their beneficiaries and affected communities,” it said in a statement to Reuters.
Should its bid to acquire RBPlat fail, Muller said Impala could either retain its current shareholding and forge a joint venture with Northam, which he said “is not ideal”, or sell its stake.
Impala’s shares fell more than 5% on Thursday after it reported a 2.1% drop in half-year profit as power cuts and a furnace rebuild hit production.
Its headline earnings per share (HEPS) – the main profit measure in South Africa – fell to 16.54 rand ($0.9089) in the six months to Dec. 31 from 16.90 rand the previous year.
Impala’s refined output declined 9% to 1.476 million ounces from 1.617 million ounces in the same period last year.
South Africa, the world’s top PGM producer, faces extended electricity cuts due to frequent breakdowns of its coal-fired power plants.
Anglo American Platinum and Sibanye Stillwater have said South Africa’s 2023 PGM output could decline significantly if the power cuts persist.
($1 = 18.1979 rand)
(Reporting by Nelson Banya; Editing by Christopher Cushing, Subhranshu Sahu, Kim Coghill, Jan Harvey and Barbara Lewis)
