| Mon 6 Jun 2005, 9:54 | | SA forex rules prove stumbling block for Norilsk |
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GOLD Fields and the gold unit of Russia’s Norilsk Nickel, its largest shareholder, want to merge, but SA’s foreign exchange controls are blocking a deal, Reuters news agency reported yesterday.
The news agency quoted an industry source as saying that the link-up between Gold Fields and Norilsk’s gold unit, Polyus, might have to wait a year or two until authorities lift forex controls.
“Gold Fields’ preferred option is a straight merger with Polyus, but exchange controls are blocking it,” the source said.
He said that Norilsk also favoured a link-up, but would not agree to a plan in which the merged company is based in a country with foreign exchange restrictions.
Gold Fields spokesman Willie Jacobsz last night described the report as “speculation” and would not comment any further on the report.
In another development, Harmony is expected to cause no further trouble for Gold Fields, after selling half of the stake it acquired in a recent hostile takeover attempt.
This means Harmony now holds just over 5% of Gold Fields, a residual stake too small to worry Gold Fields management.
On Friday, Harmony announced it had sold 30-million Gold Fields shares in the US for $315m — equivalent to about 6% of Gold Fields.
The sale was through private placement at $11,50 a share.
Harmony CE Bernard Swanepoel said at the weekend that the company planned to its remaining 26,6-million Gold Fields shares, a stake of 5,4%.
Swanepoel said that this would allow Harmony “to participate in any appropriate restructuring of Gold Fields that should eventuate.
“We think there is still a good chance that Gold Fields is restructured in a way that puts some of its assets back in play — we see this as a natural consequence of Gold Fields’ corporate shareholders, and its attempts at restructuring the company.”
Swanepoel said Harmony might “get an offer at a premium from one of the interested parties”.
Gold Fields’ spokesman Willie Jacobsz said the sale of about half of the Harmony stake in his company “is probably the best possible outcome for Gold Fields”.
“It helps to resolve any perception of an overhang in the Gold Fields share.
“Harmony remains a 5,5% shareholder, but we expect them to sell that at some stage.”
Last week, Gold Fields announced it was to appoint two directors from Norilsk, which holds 20% of Gold Fields.
“Neither Norilsk nor Gold Fields have made an offer (to Harmony), nor do they intend to make an offer,” said Jacobsz.
Swanepoel said that the appointment of the two Norilsk directors to the Gold Fields board had scuppered Harmony’s stated plan to hold onto its entire stake in Gold Fields for strategic reasons.
Harmony said the more than R2bn raised through the share sale would partly be used to repay short-term debt and to finance the development of the Hidden Valley gold deposit in Papua New Guinea.
The group may also buy back its own shares.
Harmony’s stake was sold to institutional investors by HSBC Holding investment bank on Thursday after the market closed, said Russell Julius, head of HSBC’s European equity capital markets group in London. With Bloomberg, Reuters
