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PIC backs Anglo’s management on dividend options

Amid increasing speculation that Anglo may cut its dividend.
Anglo American Plc’s biggest investor said it will support the company’s management amid speculation that world’s biggest diamond and platinum producer may cut its dividend.

“The Public Investment Corp. will support any initiatives by Anglo American that will contribute towards ensuring a sustainable future for the company and which will assist in preserving job opportunities,” the South African investor that handles public workers’ pensions said in an e-mailed statement Thursday.

The PIC, the continent’s biggest money manager, holds an 8.3% stake in Anglo, according to data compiled by Bloomberg.

There has been increasing speculation that Anglo may follow rival Glencore Plc in cutting its dividend as the world’s biggest mining companies seek to counter a collapse in commodity prices. The China-led slump has undermined Anglo Chief Executive Officer Mark Cutifani’s efforts to turn around the fortunes of a business that mines platinum and diamonds in Africa and iron ore in Brazil.

Investors are concerned about the dividend and recommended the company ditch its progressive payout policy in favor of a ratio, Jefferies LLC said in a note to investors Monday.

Anglo surprised investors in July by maintaining its dividend of 32 cents a share, defying forecasts from some analysts that the company would cut it to cope with falling profit. Cutifani said at the time that it’s always under review. The payout costs the company more than $1 billion.

The producer, which also mines copper and coal, is selling assets and is cutting jobs to trim costs. In July, it had net debt of $11.9 billion after selling its tarmac business and has a long-term borrowing target of $10 billion to $12 billion.

©2015 Bloomberg News

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