Ist schon bezeichnend wie Bernie das Verschleudern der Hälfte der GFI-Anteile versucht schön zu reden und was er damit alles tolles anfangen will:
Harmony Gold – moving on
By: Gareth Tredway
Posted: '13-JUN-05 23:00' GMT © Mineweb 1997-2004
JOHANNESBURG (Mineweb.com) -- For seven months company business took a back seat, at least in the public’s eye, during Harmony’s all-paper bid for Gold Fields.
Now the company needs to repair some of the fall-out of the failed bid and reclaim its title as the most efficient mine operator in South Africa.
Harmony chief executive, Bernard Swanepoel, and investor relations executive Brenton Saunders are fresh off a trip to the US to give shareholders the story straight from the horse's mouth.
“I think its always good for shareholders to hear it directly from us for a change and not via the media or more scaringly from a competitor's war room,” said Swanepoel on Monday from the company’s head office, “They have a chance to put their issues and questions to us.”
Amongst those issues put to Swanepoel and Saunders is what the company intends to do with the cash from the 30 million Gold Fields shares it has just sold.
“There was a perception created that we are now cash flush we would run around and do transactions,” said Saunders, “I think people are just trying to get a comfort that it is going to be deployed in a responsible way.”
Swanepoel agreed saying: “We are not going to be confused by supposedly having a lot of cash and buying everything that moves.”
The size of the stake was not judged on the money needed, says Swanepoel, but on what the market was willing to absorb.
“We did not have a targeted amount, you cannot, because you do not know what the Gold Fields share price would be,” says Swanepoel, “We brought it (the sale) forward because of how the share prices went up and we thought that was a decent price to exit and certainly I think we got it right.”
Spending
The company has already decided where to spend the near R2.14 billion in cash that it raised from the sale of the Gold Fields shares.
First is to service and retire the Harmony’s “expensive short-term debt” which Swanepoel reckons will take up between R600 million and R700 million.
Next is the completion of the restructuring process where up to 11,780 employees have been ear marked for possible retrenchment. “The completion of the restructuring process we estimate will take about R400 million,” says Swanepoel, but he adds that this is not just retrenchment packages but also the cash consumed in the process until restructuring on these cash hungry operations is complete. Currently this looks like it will be done by mid-July.
The last bit of cash will go to South Africa’s growth projects and also on construction of the company’s Papa New Guinea gold mine which will draw down on A$177 million (R885 million) over an 18 month period.
“Shareholders want us to finish this restructuring and re-establish profitability, generating cash over and above our capital needs,” says Swanepoel, “There (Gold Fields’) PR has created the impression that some how our balance sheet is weak, and of course selling those Gold Fields shares has just confirmed what we always said, that the Gold Fields stake was near cash.”
“When the guys went to bed one night it was shares, when they woke up the next morning it was cash, and so balance sheet issues we have addressed and with the restructuring issues there is no quick magic, we are busy with it and that needs to be finished.”
Book Loss
Recently Harmony sold down its share in African Rainbow Minerals (ARM) its black empowerment partner. After selling 18% of its 20% stake, the company recorded a book loss of R550 million on the sale in the March quarter.
“There will be” another book loss after the sale of the Gold Fields shares. “You would do that anyway even if we owned them,” says Swanepoel, “Because we would reclassify the stake from a strategic holding to an investment holding and so you would have to mark-to-market.”
Swanepoel says the shares are valued at about R81 or R82 apiece in the Harmony balance sheet and that they were disposed for about R72 or R73 per share. A crude calculation would put the loss on sale of the 30 million plus shares at around R300 million.
“If I remember correctly it was in the order of R80 a share and then of course the R170 million cost of the whole acquisition of this stake got capitalised,” Swanepoel said.
But he points out that if the Gold Fields share price exceeds R82 by the end of the quarter, Harmony will show a paper profit on the stake it still holds.