Mining giant AngloGold Ashanti has dropped its plans to demerge some of its non-South African assets and create a new UK-listed company after shareholders expressed concerns about aspects of the proposed transactions.
Shareholders’ main issues were about the equity capital raising needed for restructuring, which required regulatory and other approvals.
AngloGold Ashanti CEO Srinivasan Venkatakrishnan said: "The extent of the capital raising, right now, is a price no one was prepared to pay."
The company said in a statement: "AngloGold Ashanti has, therefore, decided not to proceed with the restructuring and capital raising, as currently proposed.
"The company will continue to evaluate all options to address debt levels and unlock value, taking into account the feedback from its shareholders and its business needs."
As per the announcement made last week, the company planned to give 35% of the new company’s shares to its shareholders and retain the remaining 65%, and also hoped to raise $2.1bn through a rights issue before the demerger, with the aim of reducing its debt of around $3.2bn.
However, the company added that: "Reducing current high debt levels and improving overall financial flexibility remain priorities for AngloGold Ashanti, which will now intensify its focus on value creation opportunities deliverable within its current structure.
"The company will continue to aggressively identify and implement further operational efficiencies, reduce overhead structures and pursue other initiatives to improve underlying business performance."
The demerger plan from AngloGold came after the recent announcement by BHP Billiton to move some of its non-performing assets into a new metals and mining company and focus on key commodities.