Anglo American Appoints Fortescue's Stephen Pearce as CFO
September 23 2016 - 07:21AM
Dow Jones News
By Alex MacDonald
Anglo American PLC on Friday named a new chief financial officer
with a reputation for cutting debt amid what the company calls a
"radical" restructuring of its operations and workforce.
Anglo American's hefty debt burden raised investor concerns
earlier this year, when commodity prices slumped to multiyear lows,
prompting the cost of insuring Anglo American's debt against
default to surge above its U.K.-listed peers.
The U.K.'s fifth-largest listed mining company by market value
appointed Stephen Pearce, currently CFO of Australian iron ore
producer Fortescue Metals Group Ltd., to replace current CFO René
Médori, who announced earlier this year his intention to retire in
2017.
Mr. Pearce, 52, faces the challenge of trying to transform one
of the world's most diversified miners--which digs for minerals,
including South African iron ore, Colombian coal and Chilean
copper--into a leaner operation focused on copper, diamonds and
platinum.
The storied 99-year-old company, founded in South Africa by
Ernest Oppenheimer, wants to sell $3 billion to $4 billion worth of
assets this year to help reduce its net debt to less than $10
billion by year-end from $12.9 billion last year. This includes
hiving off more than half its mining businesses in the near-term,
which accounted for about one third of its 2015 underlying
earnings, excluding one-off items such as accounting
write-downs.
By midmorning in London, Anglo's shares were up 0.4% at 924.1
pence a share.
Mr. Pearce joined Fortescue as CFO in 2010 and played a major
role in steering the world's fourth-largest exporter of the
steelmaking commodity through a period of major growth and then
pain when iron ore prices slumped.
Fortescue borrowed heavily to build a vast network of mining
pits, rail lines and port infrastructure in Australia's Pilbara
region in a decadelong quest to break the dominance of Vale SA, Rio
Tinto PLC and BHP Billiton Ltd. in iron-ore mining.
However, a slump in iron ore prices resulted in a brush with
lenders in 2012 just as the company was ramping up production. Mr.
Pearce helped shift the company's focus toward slashing costs and
cutting debt, reducing the amount it owed to $8.4 billion by
December-end from a peak of around $13 billion in 2013. He also
refinanced all debt with the first payment due in 2019 at the
earliest.
Mr. Pearce will join Anglo on Jan. 30 but won't become Anglo's
CFO and executive board director until after the company's annual
general meeting on April 24, when Mr. Médori is set to retire.
Mr. Pearce will earn a salary of GBP775,000 ($1.0 million) plus
a bonus contingent upon his performance. This is less than Mr.
Médori's salary of GBP804,000 last year. He will also receive
GBP3.4 million in compensation for forfeited compensation from his
previous employer, 90% of which will be paid in Anglo American
shares.
Write to Alex MacDonald at alex.macdonald@wsj.com
(END) Dow Jones Newswires
September 23, 2016 07:06 ET (11:06 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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