Johannesburg - Impala Platinum Holdings, the world’s second-biggest producer of the metal, plans to raise R4 billion ($298 million) through the sale of shares after a plunge in prices cut full-year profit by 58 percent.
Impala is seeking to raise cash as it continues the expansion of its Rustenburg operation, the world’s largest platinum mine, where it requires R3.9 billion to complete two new shafts, the Johannesburg-based producer said in a statement Thursday.
Impala lowered its guidance for capital expenditure for the 2016 fiscal year to R4.2 billion.
“Written support to vote in favour of all the relevant resolutions has been received from 49 percent of Implats’ shareholders” including Coronation Fund Managers, Royal Bafokeng Holdings and the Public Investment Corporation, the company said in a separate statement, referring to the proposal to raise funds. The plan is “fully underwritten by UBS,” it said.
South African platinum producers have cut jobs, closed shafts and delayed spending as prices dropped to the lowest in six years. Earnings have also been hit by the cost of returning to normal production levels after a strike during the first half of 2014.
Impala will continue to invest in new shafts because it sees long-term demand for platinum group metals remaining strong, it said.
Earnings, excluding one-time items, were R221 million, or 36 cents a share, in the 12 months ended June 30, compared with R523 million, or 86 cents a share, a year earlier, the group said. Gross refined platinum output gained 8.3 percent to 1.28 million ounces while the Rustenburg mine achieved its target of 575 000 ounces.
Impala’s performance “was severely impacted by the ramp-up of the Rustenburg operations following prolonged industrial action across the platinum industry,” the company said.
The temporary closing of its Bimha mine in Zimbabwe and power shortages in South Africa also disrupted operations, it said.
BLOOMBERG