Angloplat gets rights issue backing, eyes upturn

By James Macharia

JOHANNESBURG (Reuters) - Mining bellwether Anglo Platinum said it would pay off most of its debt via a $1.6 billion rights issue backed by its owner, and forecast its markets would turn around in 2010, sending its shares higher.

Angloplat, which supplies close to half the world's platinum, announced the discounted cash call on Monday together with sharply weaker full year earnings in line with its guidance, and said demand for the metal -- which closely tracks production cycles in the auto industry -- would grow this year.

Majority owner Anglo American Plc backed the rights issue, which Angloplat had flagged last year, boosting sentiment in the South Africa-listed firm's shares which rose 6.10 percent to 730 rand by 1011 GMT.

"People have been expecting the rights issue, and even though it is deeply discounted, it broadly means the company will be less of a risky investment now," Barend Ritter, a platinum analyst at Sanlam Investment Management, said.

"The market has priced in that and also the headline earnings fall, so people are looking through these to the fact that Angloplat has met promised targets, including production, costs, safety and the outlook is not too bad at all."

The firm, which said last year it was considering a cash call to ease debt that ballooned following the global economic downturn, plans to issue close to 25 million new shares at a discounted 502.18 rand each.

The 12.5 billion rand raised would cut net debt to 6.8 billion, it said.

Anglo American, which owns about 80 percent of Angloplat, said it would subscribe in full to its entitlement and underwrite the minority portion of the offer, whose proceeds would also settle Angloplat's debt with Anglo.