IMPALA Platinum (Implats) today clarified a special resolution for its annual general meeting on October 30 in which it would ask shareholders to approve financial assistance to a broader group of recipients than usual.
Normally, Implats provide direct and indirect support, such as inter-company loans, to subsidiaries including Marula Platinum (Pty) through which it has a 73% stake in the Marula mine. The balance of shares in Marula are owned by empowerment groupings.
For its upcoming AGM, however, Implats has extended the list of intended recipients of financial support which the platinum miner said was to meet its obligations of a proposed empowerment scheme set down in its takeover of Royal Bafokeng Platinum (RBPlat). These schemes are not held in Implats’ subsidiaries which is the normal ambit of the resolution.
International Shareholder Services (ISS), which guides its members of how to vote on company matters, had earlier recommended that Implats shareholders vote against the resolution. “This is a broader authority than what many shareholders may prefer to approve in advance,” ISS said in an October 20 report.
“As such shareholder support to approve financial assistance in terms of Sections 44 and 45 of the Companies Act is not deemed warranted at this time.” If ISS’s recommendation was supported, it would require Implats to hold separate special general meetings in order to finance RBPlat related empowerment deals.
“In most cases, the financial support would be to guarantee vendor-financed agreements, which have yet to be determined,” said Johan Theron, spokesperson for Implats.
As part of its successful takeover of RBPlat, Implats announced a three part empowerment structure both aligning RBPlat with its own schemes and creating new ones. The empowerment agreement was critical in having the Public Investment Corporation, a then 10% shareholder in RBPlat, support its offer.
Implats said it would create a community share ownership trust holding a 4% equity interest in Implats and RBPlat through its subsidiary Royal Bafokeng Resources (RBR). An employee share ownership trust holding 4% equity interest in RBPlat’s assets through RBR would also be created. This would replace RBPlat’s employee share ownership plan in place currently which allows for a 3% profit participation.
A significant third leg of the new empowerment structure is the introduction of Siyanda Consortium which will buy a 5% equity interest in both Implats and RBR. This will be funded through Siyanda equity, debt with the capital repaid through dividends received with a trickle-down dividend payable to Siyanda shareholders.