AngloGold Ashanti: Pressure for asset sale to reduce debt

ANGLOGOLD Ashanti is being pushed to consider asset sales to cut $3.2 billion (R36bn) of debt as investors sell the company’s bonds and stock following a botched share sale and asset spin-off. The third-biggest gold producer, whose net debt to equity ratio is higher than any major rival, could raise $1.1bn selling ageing mines in Mali and Ghana as well as exploration projects in Colombia, Barclays said. The yield on AngloGold’s August 2022 dollar bond has climbed 27 basis points since September 11 as investors have rebelled against its plan to raise $2.1bn in a rights issue, or a third of the company’s then market value. “They will look to dispose of assets,” Jon Brager, a credit analyst at Hermes Fund Managers in London, said last week. “Everyone agrees that the business needs to reduce debt in order to execute its long-term strategy.” After investors rejected its plan, AngloGold said it was considering “portfolio simplification” to reduce borrowings. The shares have tumbled 34 percent since this year’s peak in March, and gained 0.82 percent to close at R140.16 on Friday. “We are looking at asset sales,” AngloGold spokesman Stewart Bailey said last week. “Our targets are realising value from the Colombian portfolio and a partner for Obuasi [in Ghana].” Moody’s expected the firm to maintain healthy debt and liquidity ratios. – Bloomberg