Please note that this call is being recorded. I would now like to turn the conference over to the CEO, Paul Byrne and the CFO, Les Kritzia.
Please go ahead.
Good morning, everybody. Thank you for joining us on the roundtable media conference post recent announcement. I would imagine that those people on the line have listened to the presentation. So I'm not going to regurgitate what we've said. But first in summary, it is Northern's firm belief that it is in everybody's best interest that we remain empowered.
But at the same time, we have got a lot of value sitting inside the Zambezi transaction and we have the ability to crystallize that value on behalf of both Zampuzi shareholders, but of course also Northern shareholders. At the same time, we don't want to lose our empowerment status. So you will see there's a Part D, which is centered on our employees and communities for the next 15 years. And I think on the whole, it's a very good outcome for all parties. I hope you have appreciated that from the presentation, but it is probably easier if we go straight to questions rather than me giving a long spiel.
So if I can open up the lines immediately for questions and then we'll go from there. Let's see where the conversation takes us.
Thank you very much, first question comes from Danilo Fakou from PR. Please go ahead, Danilo. Good morning, Mr. Dan.
Hello, Danielle.
How is the transaction
Today, we will see. Obviously, we've only announced this morning. So you can imagine, we will engage from here. I think what I can say so far is that we have been able only at this stage to engage with a few shareholders. And obviously, you will have seen on the press release this morning that those few shareholders are extremely supportive of the transaction so far.
Now we are public, and then we take the transaction to the broader community and interested parties, and that's a job still to be done. Thank you. Thanks,
The next question comes from Peter Gane from USAT Trust. Please go ahead, Peter.
Could you just summarize the fit on ordinary shareholders? Hello, Peter. Good to talk to you again. As Paul is speaking. Good morning, Paul.
Good morning. So in a nutshell, Peter, at the moment, as we stand, pre transaction, there are 509,000,000 shares in issue for Northern. As you know, you will probably know the share price is hovering around the ZAR2.45 per share and that gives a market capitalization of around ZAR130 1,000,000,000. The number of shares in issue will reduce from the 409,000,000 or 410,000,000 shares down to 378,000,000 shares in issue. So this is effectively a 25 percent plusminus share buyback of the company.
And as you will also be aware, a share buyback of this size with attractive pricing is extremely beneficial for ordinary shareholders such as yourself. Thank you very much. It's more common to see a bonus issue, isn't it, than the share buyback of this size? Well, I mean, obviously, Peter, you can return value to shareholders in multiple of ways. And if we do complete this share buyback, you can expect an uplift, resultant uplift in the equity value, your equity value.
And that is, of course, another method of returning value to shareholders. I do want to point out that the capital allocation decision that we have made today does not preclude dividends. I want to be very specific on that, does not preclude dividends. Pretty much. Thanks, Peter.
Thank you. The next question comes from David from Mining Chemex. Please go ahead.
Paul, yes. Thank you. Obviously, it's a very complex deal. So I guess we're all trying to understand just what is going on. I want to try and get a handle on what the company's balance sheet looks like post the deal, get an idea of where the cash is, where the net debt situation is.
Can you provide any kind of insight into post all of these distortions, if you recall, what kind of balance sheet to shareholders get?
Yes. Okay, David, I'm going to answer that question in 2 parts and maybe the second part, I'll let Alek answer, who's also with me this morning, our CFO. So first of all, you see it as a complex deal. It's a share buyback, David. It's not particularly unusual.
It's a very, very large share buyback, and that is unusual. So 25% share buyback, I would challenge you to go and see if you've seen a bigger one. Secondly, that share buyback is done at very attractive prices. Again, very straightforward. When you do a big share buyback like that at a very attractive price, clearly, it's value accretive to ordinary shareholders.
It's a compelling value proposition for ordinary shareholders. I'm going to now hand back to Alette to maybe take you through the final part of your question.
Hi, David. As we mentioned at our results presentation on Friday, if you look at the cash generative ability of the group going forward with our increased production rate as well as the increase in metal prices, it is very, very favorable. So even with the cash that will apply for the wrap up of the Zambezi transaction that will be by means of purchasing additional ZPLPs that will amount to about Zand2 1,000,000,000 and then also a cash injection into Zandivi to settle their taxes as well as the cash distribution. We quoted around Zandivi 5 point 3,000,000,000 this morning. Even if you take all of those cash requirements of the transaction into account, with the increased production profile of the group, Northern Platinum will be in a very, very good position going forward.
So if one looks at the net debt to EBITDA ratios, it will be more favorable than where we were at 31%. I don't know if that answers your question or if you've got a follow-up.
I think,
it's that in context. I guess in context, yes. That's fine. Thank you.
Mr. Dunn, it seems like there are no further questions in the queue. Can I hand back to you for closing comments?
Yes. Thanks very much, everybody. Appreciate the call. And as always, you do know Northern is a very open company. You're welcome to give us follow-up questions offline on the e mail.
Thanks very much, everybody. We'll see you soon.