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Delisting Announcement • Sep 10, 2014

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ANGLOGOLD ASHANTI LIMITED - Corporate Restructure & Capital Raising

PR Newswire

London, September 10

                                                  AngloGold Ashanti Limited                                 (Incorporated in the Republic of South Africa)                                                       Reg. No. 1944/017354/06)                                  ISIN No. ZAE000043485 - JSE share code: ANG                                         CUSIP: 035128206 - NYSE share code: AUNot for release, publication or distribution, directly or indirectly, in orinto the United States, Canada, or Japan.10 September 2014NEWS RELEASEANGLOGOLD ASHANTI PROPOSES A CORPORATE RESTRUCTURE AND A CAPITAL RAISING, ANDCAUTIONARY ANNOUNCEMENT(JOHANNESBURG) - AngloGold Ashanti Limited ("AngloGold Ashanti") has madesignificant progress in the past two years in transforming its business toimprove efficiency and competitiveness, against the backdrop of a 25% drop inthe gold price. The company has returned to production growth, commissioned twonew projects and significantly reduced costs. In the second quarter of 2014,compared with the corresponding period a year earlier, production rose 17% to1.098Moz, all-in sustaining costs fell 19% to $1,060/oz, corporate andmarketing costs were down 65% to $20m and EBITDA was up 33% to $382m. Theseresults were achieved whilst posting a record safety performance. Havingevaluated several options to unlock further value in the business, thecompany's Board and management has decided to explore the possibility ofrestructuring AngloGold Ashanti into simpler and more focused entities, whichthey believe will present the best opportunity to realise the potential of thecurrent portfolio.Accordingly, AngloGold Ashanti has applied for, and has received, approval fromthe South African Reserve Bank ("SARB") to restructure its international miningoperations under a new UK holding company ("Newco") (the "Restructuring"). ThisRestructuring will be subject to approval of the shareholders of AngloGoldAshanti. Newco intends to seek a premium listing on the London Stock Exchange,an inward listing on the Johannesburg Stock Exchange ("JSE") and a listing ofAmerican Depositary Receipts ("ADR") on the New York Stock Exchange ("NYSE").The intention is that Newco would hold AngloGold Ashanti's portfolio of goldproduction and exploration assets located outside South Africa.AngloGold Ashanti would continue to remain a South African domiciled businessthat would focus on maximizing the value of its current portfolio and, overtime, the intention is that it would consider developing a multi-commoditygrowth strategy in South Africa and beyond. It will remain listed on the JSEand retain a listing of its ADRs on the NYSE. AngloGold Ashanti intends topartially demerge 35% of Newco to its shareholders and would initially retain a65% controlling interest.AngloGold Ashanti believes that separation into separately-listed vehicleswould allow independent management teams to execute distinct strategies inorder for each entity to compete as effectively as possible in the context ofthe current industry and macro-economic environment. Simplified portfolioswould allow each management team to accelerate initiatives to improveproductivity and operating costs and to realise the potential where appropriateof their growth opportunities whilst also allowing for flatter and more costeffective overhead structures. This, in turn, would enable the combinedcorporate costs of both entities to be materially reduced. Separate listingswould also allow each business to be more appropriately valued to reflect theirindividual investment cases and asset profiles, each with an independentbalance sheet and associated access to capital in distinct markets. Uponimplementation of the Restructuring, it is expected that both companies willchange their names.Chairman Sipho Pityana commented: "It has become increasingly clear that thetwo distinct parts of our portfolio require different strategies, focusedmanagement and should be appropriately capitalized to realise their fullpotential and unlock further value for shareholders. In South Africa, we willcreate a standard bearer for the mining industry with a structure allowing itto chart an exciting growth trajectory while allowing investors to properlyvalue its high quality, cash generative portfolio. The Newco portfolio isexpected to have a premium listing in London and will receive the managementfocus, resources, financial flexibility and structure required to realise thefull potential from its portfolio of growth assets.""The South African regulatory authorities have been supportive in clearlyunderstanding the strategic rationale of this proposed transaction, and alsothe benefit to be unlocked given our specific set of circumstances," ChiefExecutive Officer Srinivasan Venkatakrishnan said. "These two very distinctsets of assets will benefit from the more focused structure and capitalallocation."Board and ManagementAngloGold Ashanti's board will continue to be chaired by Sipho Pityana and theexisting board will remain with the exception of Michael Kirkwood and DavidHodgson who would resign from the AngloGold Ashanti Board to join the NewcoBoard at the time of its establishment. It is intended to establish the NewcoBoard consistent with the principles of the UK's Corporate Governance Codeincluding the appointment of a majority of Independent Non-Executive Directorsand a Senior Independent Director. The Newco Board would be chaired by MichaelKirkwood.Whilst the AngloGold Ashanti shareholding in Newco remains above 20%, AngloGoldAshanti will have the right to nominate two non-executive Board members. SiphoPityana and Srinivasan Venkatakrishnan will initially serve as AngloGoldAshanti's non-executive directors on the Newco Board, with Sipho Pityanainitially in the role of Deputy Chairman.Srinivasan Venkatakrishnan will remain as CEO of AngloGold Ashanti and willcontinue to lead an executive team comprising incoming Chief Financial OfficerChristine Ramon, Chief Operating Officer Mike O'Hare and Italia Boninelli.Commenting on the Restructuring, Srinivasan Venkatakrishnan, said: "Ourdecisive response to a challenging gold price environment has seen us return togrowth, aggressively reduce costs and improve free cash flow, all while postinga record safety performance. We believe that the structural change we haveproposed will allow our shareholders to focus on, and support, the key assetsof particular interest to them. Each business will have greater focus andseparate identities which enable them to chart distinct, value-creatingstrategies going forward."Newco will be led by CEO-designate Charles Carter, along with President andChief Operating Officer Ron Largent, who will be joined on the executive teamby Graham Ehm, Maria Sanz Perez and David Noko. A new CFO will be recruited forNewco in due course.RecapitalisationSeparate from the Restructuring, the Board has concluded that current debtlevels are too high and therefore an equity capital raising, in the form of arights issue to AngloGold Ashanti shareholders, is being contemplated, whetheror not the proposed Restructuring occurs. Under the Restructuring, AngloGoldAshanti, which will continue to house the South African assets, has agreed thatit will be debt free upon implementation of the Restructuring (with theexception of existing guarantees by AngloGold Ashanti of debt that remainsoutstanding) in order to comply with the conditions of the SARB approval. It isfor this reason that the company is potentially targeting gross proceeds fromthe contemplated rights issue in the order of approximately US$2.1 billion inorder to be able to pursue the Restructuring. The proceeds would be usedpredominantly to repay existing debt by initially redeeming 35% of theaggregate principal amount outstanding of the company's 2020 8.5% bonds underthe provisions of the related indenture that allows the company to redeem bondsfrom the net cash proceeds of an equity offering. The company will retainflexibility to either repay amounts drawn under certain revolving creditfacilities and/or deploy the residual funds to further strengthen the company'sbalance sheet.The completion of the proposed rights issue cannot be assured as a fundraisingof this scale will require shareholder approval and an increase in authorisedshare capital. Updates on this process will be provided in due course.The company may also consider utilising its general authority to issue forcash, up to 5% of the shares in issue as approved at the Annual General Meetingheld in May 2014.ImplementationAngloGold Ashanti is continuing to review the implementation of the proposedRestructuring with a view to execution during 2015. The Restructuring will besubject to a number of approvals including shareholder approval at a GeneralMeeting, as well as receipt of required regulatory consents and approvals injurisdictions in which Newco conducts business, and other third-party consents.The proposed equity capital raising would also need to be completed in advanceof the contemplated Restructuring and would also be subject to shareholderapproval and an increase in authorised share capital. The Restructuring mayresult in additional and unforeseen expenses, and the required consents andapprovals, if received, together with the arrangements required to separate thebusiness, may impact the nature of the Restructuring, including the assetcomposition, structure and timing as well as the economic impact of thetransaction and its commercial benefits, and may impose conditions andlimitations on the business and operations of Newco. There can also be noassurance that either the Restructuring or the capital raising will proceed.Approval has been received from SARB for the Restructuring, which is subject tocertain conditions including the requirement for South Africa to remainAngloGold Ashanti's effective place of management with the majority of theBoard including the Chair of the Board, the Chief Executive Officer and theChief Financial Officer and the majority of executive committee membersremaining resident in South Africa; where debt has been guaranteed by AngloGoldAshanti, these guarantees will remain in place, with appropriate "arm's length"arrangements to be made with Newco and subject to these guarantees beingextinguished once the related debt has been repaid in full and no newguarantees being put in place; AngloGold Ashanti must notify SARB in advance ofany subsequent transactions to reduce its shareholding in Newco; AngloGoldAshanti will use best efforts to ensure that upon implementation of theRestructuring, on an unconsolidated basis, it will be gross debt free.AngloGold Ashanti's advisers are as follows:Financial advisers on the transaction and proposed capital raisingUBS AG and Goldman Sachs InternationalFinancial adviser on liability managementBarclaysLegal Advisors to the CompanyCravath, Swaine & Moore LLPBowman Gilfillan IncSlaughter and MayIndependent Financial Advisors to the AngloGold Ashanti BoardRothschild (South Africa) (Pty) LtdIndependent Legal Advisors to the AngloGold Ashanti BoardENS AfricaCautionary announcementThe Restructuring and contemplated equity capital raising may have a materialeffect on AngloGold Ashanti securities. Holders of AngloGold Ashanti securitiesare accordingly advised to exercise caution when dealing in AngloGold Ashantisecurities until a further announcement is made.ENDSSponsor to AngloGold AshantiUBS South Africa (Pty) LimitedCONTACTSMediaBrunswick Group   +44 (0) 20 7404 5959 / +27   anglogoldashanti@brunswickgroup.com                  (0) 11 502 7300InvestorsStewart Bailey    +27 81 032 2563 / +27 11 637 6031 sbailey@anglogoldashanti.comFundisa Mgidi     +27 11 6376763 / +27 82 821 5322  fmgidi@anglogoldashanti.com(South Africa)DisclaimerThis announcement shall not constitute an offer to sell or the solicitation ofan offer to buy securities, nor shall there be any sale of the securitiesdescribed herein, in any jurisdiction, in which such offer, solicitation orsale would be unlawful prior to registration or qualification under thesecurities laws of such jurisdiction or without an exemption from theregistration or qualification requirements under the securities laws of suchjurisdiction.This announcement shall not constitute an offer to sell or the solicitation ofan offer to buy securities in the United States. Securities may not be offeredor sold in the United States absent registration under the U.S. Securities Actof 1933, as amended, except pursuant to an exemption from the registrationrequirements thereof. Any public offering of securities to be made in theUnited States will be made by means of a prospectus that may be obtained fromAngloGold Ashanti and that will contain detailed information about AngloGoldAshanti and management, as well as financial statements. AngloGold Ashantiintends to register the securities in the United States.This announcement includes "forward-looking information" within the meaning ofSection 27A of the Securities Act, and Section 21E of the Securities ExchangeAct of 1934, as amended. All statements other than statements of historicalfact are, or may be deemed to be, forward-looking statements, including,without limitation those concerning: the benefits and completion of thecontemplated Restructuring, the completion of the proposed equity capitalraising, the strategy of AngloGold Ashanti and Newco, the economic outlook forthe gold mining industry; expectations regarding gold prices, production, cashcosts, all-in sustaining costs, cost savings and other operating results;return on equity, productivity improvements, growth prospects and outlook ofAngloGold Ashanti's operations, individually or in the aggregate, including theachievement of project milestones, the commencement and completion ofcommercial operations at certain of AngloGold Ashanti's exploration andproduction projects and the completion of acquisitions and dispositions;AngloGold Ashanti's liquidity and capital resources and expenditure; and theoutcome and consequences of any potential or pending litigation or regulatoryproceedings or environmental, health and safety issues. These forward-lookingstatements are not based on historical facts, but rather reflect AngloGoldAshanti's current expectations concerning future results and events andgenerally may be identified by the use of forward-looking words or phrases suchas "believe", "aim", "expect", "anticipate", "intend", "foresee", "forecast","likely", "should", "planned", "may", "estimated", "potential" or other similarwords and phrases. Similarly, statements that describe AngloGold Ashanti'sobjectives, plans or goals are or may be forward-looking statements.These forward-looking statements involve known and unknown risks, uncertaintiesand other factors that may cause the AngloGold Ashanti's actual results,performance or achievements to differ materially from the anticipated results,performance or achievements expressed or implied by these forward-lookingstatements. Although AngloGold Ashanti believes that the expectations reflectedin these forward-looking statements are reasonable, no assurance can be giventhat such expectations will prove to have been correct.The forward-looking statements included in this announcement are made only asof the last practicable date. AngloGold Ashanti undertakes no obligation toupdate publicly or release any revisions to these forward-looking statements toreflect events or circumstances after the date of this announcement or toreflect the occurrence of unanticipated events. All subsequent written and oralforward-looking statements attributable to AngloGold Ashanti or any personacting on its behalf are qualified by the cautionary statement in this section.For a discussion of risk factors, shareholders should refer to the annualreport on Form 20-F for the year ended 31 December 2013, which was filed withthe Securities and Exchange Commission on 14 April 2014. These factors are notnecessarily all of the important factors that could cause AngloGold Ashanti'sactual results to differ materially from those expressed in any forward-lookingstatements. Other unknown or unpredictable factors could also have materialadverse effects on future results.The distribution of this announcement in certain countries may constitute abreach of applicable law.This announcement may not be published, forwarded or distributed, directly orindirectly, in the United States (including its territories and dependencies,any state of the United States and the District of Columbia), Canada, Japan orany other jurisdiction where such release is prohibited.AngloGold Ashanti LimitedIncorporated in the Republic of South Africa Reg No: 1944/017354/06ISIN No. ZAE000043485 - JSE share code: ANG CUSIP: 035128206 - NYSE share code:AU

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