JOHANNESBURG – The government will need between $500-million and $1-billion in hard cash to honour its commitment of paying South Africa’s Implats fair value for control of Zimplats, it was revealed yesterday.
Treaty protection under the South Africa-Zimbabwe bilateral agreement commits the Zimbabwe government to paying fair compensation for shares that it is forcing Implats to sell to it.
There is no point in Implats going back to the Zimbabwe negotiating table if South Africa’s errant neighbour is unable to show that it has access to between $500-million to $1-billion in cash to pay for the 31% of Zimplats, analysts have calculated.
While Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere has agreed in principle to be “fully contributory for cash at an independently determined fair value to be agreed”, consensus in financial circles is that it would surprise on the upside if Zimbabwe is able to come up with even the $500-million that is required to cover the barebones of the real value – $153-million for the land that Implats voluntarily gave over in exchange for empowerment credits that did not materialise, plus the $350-million that represents 31% of Zimplats’ current market capitalisation.
However, Laurium Capital fund manager Gavin Vorwerg made the point during the Implats analyst and media conference call that any independent expert would value 31% of Zimplats at “a significantly higher figure” than the $350-million value that 31% of the current market capitalisation amounts to.
In arriving at fair value, Implats would take into account the net present value of Zimplats’ Phase 2 expansion that was in the process of ramp-up, as well as planned future investment and the value of the platinum that is still in the ground. — miningweekly.com