Sibanye differentiates the cream of the crop

Sibanye-Stillwater triggered a wave of speculation when it announced a simplification of its holdings structures, moving its gold assets into their own division.

While the move to separate the assets into cleaner and more acceptable structures has been a year in the making, some analysts and commentators immediately saw it as the precursor to Sibanye ditching its gold mines.

Sibanye has grown into the world’s largest platinum miner and the second-largest source of platinum group metals in four years. These are the star assets in the group and bring the requisite geographical diversity to manage risk, stretching from SA to Zimbabwe and the US.

The gold assets are all in SA, which is perceived as risky. They include three deep-level gold mines, a 38% stake in tailings retreatment specialist DRDGold and a number of partially built assets such as Burnstone and unmined resources.

Pulling the gold assets out of the listed holding company immediately sparked comments that Sibanye was going to remove gold from its portfolio. As Noah Capital Markets analyst Rene Hochreiter succinctly summed it up, it resolves the “classic ‘ice-cream and dung’ dilemma” and opens the way to better ratings for each of the subsidiaries because investors did not like the mix of assets.

The reorganisation also allows Sibanye to advance its thinking on another listing, perhaps in New York or London, giving investors a cleaner, better-understood structure.

It’s going to be some time before Sibanye makes use of the new structure. The four options are to keep the businesses as they are in the group, sell the gold assets, separately list them or move the company’s primary listing offshore.

ASCENDIS

Anumber of companies have recently announced delays in the release of their financial results, sometimes at the 11th hour. One such company is health-care group Ascendis Health, which has pushed back the release of its annual results twice. The financials are now scheduled to be out by October 31.

On Wednesday last week, the company said it had rescheduled the release of the results due to what it said were complexities relating to the treatment of discontinued operations and new accounting standards.

That is the most the company has disclosed and the terse explanation opens the door to speculation in light of the restructuring and leadership changes at the firm.

Ascendis, whose brands include Bettaway and Solal, has offloaded a handful of assets recently, hence the uncertainty about how it accounts for discontinued operations.

As part of a review of its business, in May the company announced the sale of the Afrikelp, Efekto and Marltons businesses within Ascendis Biosciences. The shake-up, which entails the disposal of noncore assets and businesses, is meant to enhance organic growth, improve cash generation and increase profitability. The biosciences division is considered noncore to the group’s strategy.

Ascendis has had a tough year and new CEO Mark Sardi, whose tenure begins on October 14, has his work cut out for him as he tries to turn its underperforming businesses around, dispose of noncore assets, reduce gearing and improve cash management.