JOHANNESBURG: Northam Platinum, a smaller South African platinum producer, will buy black-owned resources firm Mvelaphanda Resources for $136 million in shares, giving it access to platinum and diamond projects.
The two companies said in a joint statement on Tuesday that Northam will offer 20.9 new million shares to Mvela shareholders, valued at 982.8 million rand ($136 million).
Prior to the acquisition, Mvela will spin off its 50 percent stake in Northam worth about $1.1 billion to its own shareholders. Mvela has been looking to sell down its stakes in other companies to comply with JSE rules on cross-shareholding and delist.
JSE rules bar a listed firm from generating more than half of its earnings from an investment in another listed firm, or having more than three quarters of its net asset value tied in another listed company.
Under those rules, Mvela would be forced to become a mining operator itself, or delist. The company had previously said it planned to delist, and said on Tuesday it would delist following the Northam deal.
Mvelaphanda Resources shares gained 3.5 percent to 39 rand by 0916 GMT, outperforming a slightly firmer JSE All-share index.
Northam shares were flat at 45 rand.
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