Anglo American PLC announced on Tuesday that its subsidiary, Anglo American Platinum Ltd, has launched an accelerated bookbuild offering to raise around R 7.5 billion in a move aimed at countering ‘flowback’.

The placing come after Anglo American in May unveiled its new strategic plan that will see it ‘demerge’ Anglo American Platinum and ‘divest’ or ‘demerge’ De Beers. It also wanted to divest its steelmaking coal business.

The diversified miner has said it intends to concentrate on copper and iron ore as part of its new strategy, which was unveiled after rival BHP Group Ltd launched a bid to take over Anglo American. BHP later abandoned its bid.

The London-based diversified miner said the placing shares represent about 5% of Anglo American Platinum’s total issued shares, or about 13 million shares. Anglo American owns around 79% stake in Anglo American Platinum.

The placing is being made to institutional investors only, subject to customary selling restrictions and is not an offer to the public.

The bookbuilding period for the placing will commence with immediate effect, and Anglo American Platinum reserves the right to close the bookbuilding process at any time, Anglo American said.

The results of the placing, including the number of shares to be sold and the price per placing share, will be announced as soon as practicable after the closing of the bookbuilding process.

Anglo American said the placing is intended to broaden the free float of Anglo American Platinum, reduce the number of shares distributed to Anglo American shareholders upon demerger and reduce flowback following the demerger. The placing will also raise proceeds for Anglo American.

Flowback happens when foreign investors sell shares in the company.

Shares in Anglo American Platinum fell 1.2% to R 570.58 on Tuesday afternoon in Johannesburg. In London, Anglo American stock slid 1.0% to 2,009.00 pence, while they declined 1.6% to R 466.69 in Johannesburg.

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