S.Africa's Northam Platinum buys back more Zambezi Platinum preference shares
JOHANNESBURG, Oct 15 (Reuters) - South Africa's Northam Platinum NHMJ.J on Thursday said it had bought back 3.5 billion ($209 million) of preference shares from its Zambezi Platinum ZPLPp.J empowerment vehicle, taking its stake to 70% from less than half.
Northam sees the purchases as an alternative way to return value to shareholders instead of dividend payments.
Shareholders of Zambezi Platinum, set up in 2015 with newly-issued and transferred Northam shares, include an employee trust, two community trusts and a women's group.
Northam said the Zambezi preference shares were funded by internal cash resources and their purchase will reduce its own preference share dividend expense and liability and potential financial exposure under the guarantee it gave to shareholders.
Preference shareholders get dividends before ordinary shareholders and are paid from company assets before ordinary shareholders if a company enters bankruptcy.
“This strategy will positively impact future earnings and earnings per share and will add to the success of our empowerment transaction," Northam’s chief executive officer Paul Dunne said.
Shares in Northam were down 0.70%, firmer than the Johannesburg all share index .JALSH which had weakened 1.48% by 10:19 GMT.
($1 = 16.6954 rand)
(Reporting by Tanisha Heiberg; editing by Philippa Fletcher)
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