[miningmx.com] — ANGLO Platinum, which is not a company best known for its public relations, is barring the media from its annual general meeting in Johannesburg on Monday where it wants shareholders to approve large increases for its directors.
While this may sound like a “woe is us’ gripe, it’s not. There are extremely few companies that bar the media from their AGMs, most of which are over very quickly and are dry to the point of leaving participants desiccated. Media have attended Anglo Platinum AGMs in the past, with no quibble.
It’s when journalists are barred that ears prick up. “Is there something they’re hiding, something they don’t want the market to know about?’ is the first thought.
So what is in the resolutions shareholders are voting on that Anglo Platinum might not want splashed across headlines?
Amongst the resolutions at Monday’s meeting are increases in directors’ fees. A quick scan of non-executive directors’ fees shows Anglo Platinum wants these to increase by between 20% and nearly 31%. The majority of increases are in the 27% and 28% range.
The highest increase is for the deputy chairman of the board, rising to R300,000 from R230,000. The chairman’s salary would bump up to R1m from R800,000.
These increases would come against massive spate of job cuts designed to trim costs, bolster productivity and cut out marginal production. Since October 2008, Anglo Platinum has cut nearly 19,000 jobs – nearly a quarter of its workforce — and suspended three shafts. The job cuts on its operations came mainly from cutting out contractors.
Anglo Platinum said in October 2009 it had reached a two-year wage agreement with the three major unions at its operations. The first year’s agreement was for salaries to rise between nine and ten percent. In the second year, they would rise by a maximum of eight percent or a minimum of 7.5%. The alternative for year-two is that wage rise by the consumer price index plus two percent, or whichever is greater.
Anglo Platinum has conducted a rights issue underwritten by its 78% shareholder Anglo American to raise R12.5bn to address more than R20m of debt on its balance sheet.
Anglo Platinum’s drive to cut costs and stabilise production under the management of Neville Nicolau, who was appointed CEO in June 2008, has won approval from analysts.
“A return to a “common sense’ basic mining plan (not to mention 830 million oz 3 PGE + Au reserves and resources) means to us that AMS (Anglo Platinum) is the best positioned major to respond to improving PGMs demand fundamentals we foresee both in the short, medium and long-term,’ JP Morgan Cazenove said in a note released in early March.
RBC Capital Markets analyst Leon Esterhuizen called Anglo Platinum’s productivity improvement “spectacular’ making it a “star performer’.
“Anglo Platinum remains the undisputed “turnaround king’,’ he said in a recent note. “In just six months, Anglo Platinum has gone from constantly being the highest cost producer, with the highest labour cost component to well below both Lonmin and Impala on this measure.’
Anglo Platinum also has two special resolutions. One is asking permission to buy back up to 20% of issued shares. This is not anything out of the ordinary, but it does indicate a belief in the group that it will be generating excess cash and it is prepared to use this money to bolster the share price to the benefit of shareholders.
The second special resolution outlines an intention to cancel some 836,000 preference shares. Again, analysts Miningmx spoke to were unfazed by this.
So why has Anglo Platinum decided to bar the eyes of the public from attending the AGM?
Apart from the increased fees, which is perhaps a little delicate given the country’s consumer price inflation came in at 5.7% in February and the spate of job cuts, there’s not much there to want to hide from prying eyes.
Might there be some difficult questions from minority shareholders? Possibly. But Anglo Platinum is not managed by weaklings who can’t answer a few tough questions. Take a look at the boss of their largest shareholder, Anglo CEO Cynthia Carroll. She oversaw the departure of Ralph Havenstein as CEO soon after she was appointed and she has a reputation for being as hard as nails. What would a few irate shareholders be compared to Carroll?
This decision to bar the media can hardly be counted as a PR coup, or a way to endear a company to those who disseminate news about the world’s largest platinum producer. In fact, it perpetuates a widely held view that Anglo Platinum is a rather unfriendly company or media shy at best.
