Northam May Complete Buyout of Black-Owned Stake by March 23

Northam Platinum Ltd. will as early as Tuesday announce the completion of a buyback of the 31.4% of the company held by its Black economic empowerment partners, giving it control of a share in the miner currently worth 39 billion rand ($2.6 billion), people familiar with the situation said.

The buyback curbs future liabilities for Northam as the stake is held through preference shares that would otherwise convert to ordinary stock in 2025 when the share price may be higher. The two people asked not to be identified because an announcement hasn’t been made.

The establishment of the company that currently holds the stake complies with South African laws to spread the wealth of the economy to the Black majority.

Leon van Schalkwyk, Northam’s spokesman, didn’t immediately respond to calls, emails and text messages. Chief Executive Officer Paul Dunne also didn’t answer a call to his mobile phone. South African markets are closed because of a public holiday.

Northam, which on March 11 said it already owned 87.5% of the preference shares held by the investors through a company called Zambezi Platinum RF Ltd., has been able to do the buyback as demand for platinum-group metals, including rhodium and palladium have surged, boosting revenue.

When the empowerment deal was put in place in 2016 the shares were valued at 41 rand each. Northam shares closed trade in Johannesburg on March 19 at 244.76 rand.

©2021 Bloomberg L.P.

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