ANGLO American is not only facing difficult market conditions in terms of its restructuring plans laid out in May aimed at ‘daylighting’ the group’s exposure to the copper market.

According to RMB Morgan Stanley, the UK listed group will have to demonstrate a near “surgical” facility in corporate restructuring in unbundling its 79.2% stake in Anglo American Platinum (Amplats), headquartered in Johannesburg.

The bank said underlying agreements on R52bn in Anglo guarantees must be renegotiated before the unbundling of Amplats is completed. The underlying agreements deal with aspects such as external funding lines or contracts with suppliers, the bank said.

There’s also central group insurance to which Amplats contributes R900m annually that must be restructured. Amplats must also reallocate goods and services procured from Anglo group companies. Over the last seven years, these costs have increased at a compound average group rate of 22%, said RMB Morgan Stanley.

Each of these elements highlight the level of “execution risk” of the unbundling. While adding frisson to the 18-24 month target on the proposed restructuring set by Anglo American CEO Duncan Wanblad, Amplats’ unbundling also highlights the risk implicit in BHP’s proposed takeover of Anglo which required the demerger of a 70% stake in Kumba Iron Ore as an additional pre-condition.

Wanblad’s restructuring of Amplats as well as a proposal to sell De Beers comes amid a downturn in the PGM and diamond markets which analysts say will challenge a “for value” transaction.

Shares in Anglo American rose to £27.50 per share during the period in which it held discussions with BHP which ended formally on May 29. Since then, Anglo shares have fallen back to £23.58/share. However, this is still above £21/share prior to the BHP takeover talks being made public.

Amplats and Kumba are due to report interim numbers on July 22 and 23 followed by Anglo’s interim results presentation on July 25.