Page 19 - AMANGO MODEL ANSWER 1

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2. Divest only 2 of our 8 segments –nickel as well as nobium and phosphates. Run a full
valuation exercise on all relevant subsidiaries to ensure we can raise US$6,880 (Nickel’s
book value alone right now is USD$1,968) from these to help deliver on our Net Debt target

of US$10 billion. Retain diamond, platinum, copper, coal, iron ore and manganese; to
balance our portfolio per BCG, and ensure we add value per Ashridge. You may therefore
have to rethink the US$5.8 billion cost saving policy target in the light of these fewer
disposals! But hold firm to the dividend suspension policy until we can stabilize the business!

3. Do not unbundle the property portfolio. At this time, deleveraging the balance sheet is a
better policy than share repurchase but certainly not by unbundling our residential property
portfolio. If we divest only 2 segments as above, we will not be able to achieve enough
reduction in employee numbers to justify the negative employee morale; and the union

activity this will impose on the business. Sit down with PIC, then work through the chamber
of mines to lobby government against the adverse effects of the new mining regulations –
let’s not do it alone!
th
4. Proceed to dispose of AMA-NP in Brazil for US$1.5 billion. Although prioritised 4 , you need
to carefully consider or implement this in tandem with 2 above especially on the broader
valuation exercise. This will ensure the broader policy target on Net Debt is achieved;
5. Adopt the smallest design choice in Canada and ensure a JV Agreement is in place;
6. Implement EVA, MC and Transfer pricing to resolve the ethical issues linked to bonuses; and

7. Do not resume work on mineshaft and reprimand group CEO to tread more carefully on
safety!

We trust you will find this report helpful.

Developed by The CharterQuest Institute for 'The CFO Business Case Study Competition 2017'
www.charterquest.co.za | Email: thecfo@charterquest.co.za