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Tue 12 Apr 2005, 16:00 Harmony to swell its purse with ARM deal
Harmony to swell its purse with ARM deal

 
By Justin Brown

Johannesburg - World number six gold miner Harmony Gold expects to receive R1 billion in cash from its 20 percent stake in mining group African Rainbow Minerals (ARM), within the next two to three weeks, says Harmony Chief Executive Bernard Swanepoel.

However, the establishment of the new black shareholders, who will hold the 20 percent, could take another three months to six months to complete, after the money has flowed from the banks to Harmony, he added.

Harmony needs cash as at present, it is making losses and is spending more money than it is getting in.

The group could have increased its debt or sold its 11.6 percent stake in Gold Fields, which it does not want to do, and instead chose to liquidate its stake in ARM, Swanepoel said.

On top of giving Harmony cash, the ARM transaction adds to ARM`s empowerment credentials, he added.

The sale will also undo the cross holding between ARM and Harmony, where ARM currently holds a 16.2 percent stake in Harmony, while Harmony holds a 20 percent stake in ARM.

The deal is a fully funded one that will see new black shareholders brought into ARM, Swanepoel said. - I-Net Bridge 

Published on the web by Business Report on April 12, 2005. 
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