Royal Bafokeng opts out of Implats buyout, signs deal with Northam Platinum

The final deal ‘essentially unfolded over the past seven days, but there had been previous engagement prior to that’: Albertinah Kekana – CEO, Royal Bafokeng Holdings.

FIFI PETERS: In a surprising turn of events Northam Platinum today announced a deal to secure a 33% stake in Royal Bafokeng Holdings, essentially elbowing Impala Platinum out of the race, which had announced two weeks ago that it had its eyes on the mine to buy it out – which, if that deal had been successful, could have seen Royal Bafokeng getting delisted from the JSE.

Well, that hasn’t happened. To speak about what has happened in terms of the latest developments around the deal is the CEO of Royal Bafokeng Holdings, Albertinah Kekana. Albertinah, thanks so much for your time. A lot has changed in a short space of time but just talk to us about the previous deal – Impala. What was the reason for turning it down?

ALBERTINAH KEKANA: Good evening to you and good evening to the listeners. We manage funds essentially for the benefit of our shareholders, the Royal Bafokeng nation, RBN. In assessing our investment in RBH first, and how to optimise value, we essentially had three things that we were looking for in an engagement with potential buyers.

One, we’re looking to maximise value in an asset that we have spent over 10 years developing. Secondly, it is to get an appropriate level of cash to allow us to advance our diversification strategy. Thirdly and most importantly, it is to have high-impact projects and initiatives to the benefit of the community.

So we engaged with Implats in this regard. Although they made us an offer that initially was attractive, Northam came up with a better proposition. It was the decision of the board, being our shareholder, to accept the Northam proposition.

FIFI PETERS: And when did the Northam proposition come on the scene?

ALBERTINAH KEKANA: Well, it essentially unfolded over the past seven days, but there had been previous engagement prior to that.

FIFI PETERS: All right. That previous engagement – can give us an indication of when that began?

ALBERTINAH KEKANA: I think I personally had a conversation with the CEO earlier in the year, where he had indicated that he might be interested. Then I think there were also engagements at the company level, but those really don’t matter.  The engagements that led to this transaction really unfolded over the last seven days.

FIFI PETERS: What was the value of the Impala deal?

ALBERTINAH KEKANA: I’m afraid I cannot discuss that; I am under confidentiality with respect to that.

FIFI PETERS: All right. I’m sure you would’ve seen the short-term reactions in the share prices to the announcement of the developments around this deal today. We were speaking with a market commentator who said that perhaps one of the reasons for the decline in the stock price of Royal Bafokeng today was the fact that this deal favoured the majority shareholders, and the minority shareholders are not really going to get a slice of the pie. What’s your view on that?

ALBERTINAH KEKANA: Our view is that there was a proposal to RBH and, as the board of RBH, we had to engage with what was in the best interests of our shareholder. I’m sure Northam probably have their own views and thoughts about the way forward from here, but our core mandate is to look after the interests of our shareholder.

FIFI PETERS: Okay. And then what is the way forward to here for the community of the Royal Bafokeng? What does this deal mean for them?

ALBERTINAH KEKANA: This deal essentially really is something that should be looked at in the most positive light. We have a community that has put in [effort for ] ……4:34 the development of a significant mining operation over the last 10 years with little or no dividends out of the asset. Now that the asset has ramped up and it is fully producing, it provides an opportunity to optimise value.

The Bafokeng remain a long-term player in the platinum space, in one of the most difficult ones in the country, through the shareholding in Northam and our residual interest in Royal Bafokeng Plus. But this opportunity crystallises value for the community, allowing it to further diversify the portfolio and create resilience in it. Also it allows the opportunity to thrust forward critical initiatives for the community, such as that  the projects alleviate water shortage and [give] security of water, [and] RBH has declared a dividend to provide the funding for that.

In partnership with RBN and with Northam we will be looking at three key initiatives. One is renewable energy skills development, as well as enterprise and procurement support in the mining value chain. So we think this is holistic and overall a positive development for the community.

FIFI PETERS: What are the long-term prospects of this deal? Northam did indicate the long-term potential of beefing up its stake in Royal Bafokeng, as it were. Can you perhaps just speak to the long-term thinking of your relationship with Northam Platinum?

ALBERTINAH KEKANA: I think what was also attractive in this proposition was that we were able to put the RB ……6:45 at high quality, low concentrations, together with similar quality assets, giving us a platform that allows for longevity in our investment in the platinum space. So we see ourselves as a strategic investor over the long term.

FIFI PETERS: All right, ma’am, we’ll leave it there for now. Thanks so much for your time and for joining us to break down the thinking and the reason why Royal Bafokeng decided to go with Northam as opposed to Impala Platinum. That was Albertinah Kekana, the CEO of Royal Bafokeng Holdings.



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