South Africa: A South African court ruled on 2 December 2011 that the Public Investment Corporation (PIC) can convert AfriSam's debt of US$580m into equity. PIC, which manages US$120bn in South African state pensions, will now gain control of the South African producer. This will enable it to restructure the company's debt which threatens to bankrupt the company.

AfriSam's two largest shareholders, empowerment venture Bunker Hills Investments and Holcim, previously applied to block the conversion of preference shares into ordinary shares, but this was dismissed by Judge Eberhard Bertelsmann in the North Gauteng High Court.

AfriSam CEO Stephan Olivier said, "Our focus... remains on the day-to-day operations of the company and ensuring maximum operational and financial efficiency." AfriSam had earlier said Bunker Hills and Holcim had a contractual obligation in respect of the conversion.

Holcim created AfriSam in 2006 by selling 37% of its South African business to investors led by Bunker Hills, and retaining a 15% stake. Bunker Hills had earlier said these shareholdings would be diluted to 'almost nothing' after the PIC preference share conversion.

In his ruling Judge Bertelsmann said, "There can be no suggestion that there is any illegal threat to the applicant's rights." He also said AfriSam's board must approve the conversion of the PIC's preference shares into equity within 20 days.

"Owing to the limits of confidentiality we are not in a position to provide all details. This is purely to avoid jeopardising the current stakeholder's engagements," the PIC CEO Elias Masilela said after the judgement.