Johannesburg - AngloGold Ashanti has secured a temporary relaxation in a financial ratio covenant on its revolving credit facilities in the face of volatile market conditions.
The South African-based company, Africa's largest gold producer, said on Wednesday it had received consent from two banking syndicates providing the facilities to loosen the net debt-to-EBITDA ratio to a maximum of 4.5 from 3.
“The decisive steps were taken to reposition the company to weather a lower gold price environment,” the company said in a statement.
The agreement is for the next two testing periods - Dec. 31, 2013 and June 30, 2014 - after which this financial covenant would revert to 3, the company said.
South African gold producers are facing a perfect storm as prices slide and costs soar while workers are demanding big rises in pay. -Reuters