Implats seeks R3.4 billion debt swop
Implats, the world's third-largest platinum maker said that it had received offers to convert $220m worth of bonds in early termination on Monday.
“Implats has decided to accept all such bonds for conversion in accordance with the terms and conditions set out in the invitation term sheet,” the company said.
It said it had also received indications of interest from bondholders representing a further $29m, however, the bondholders were unable to meet the deadline for administrative reasons.
“Implats intends to contact such bondholders or their representatives with the aim of accepting their bonds for conversion in accordance with the conditions and paying such bondholders an amount equal to the invitation consideration in respect of such bonds in consideration of agreeing to convert their bonds,” the company said.
Implats chief executive Nico Muller said last week that the increase in the rand platinum group metals basket price has been a tailwind for the company.
Converting the bonds would open the pathway to resuming dividend payments which were last issued five years ago.
The company said that the equity swop was aimed at easing the interest burden and was expected that once completed it would result in a saving of R114m a year, if all bondholders take the offer.
Implats which was constrained by the prolonged low price environment in tandem with the platinum industry last year said it would be closing down 5 mines and retrenching 13000 workers over the next two years in their struggling Rustenburg operations.
The announcement led to a backlash from the government, with Mineral Resources and Energy Minister Gwede Mantashe calling the company reckless.
The move was expected to reduce Implats' headcount to 27000 from a present total of 40000.
Implats said the restructuring would cost R2.7bn during 2019 and 2020, and would be funded from internal cash resources as well as selling inventories.
Implats has been the best performing stock on the JSE after jumping 104percent in the year to date on the back of record rhodium and palladium prices since last year.
The rhodium price and palladium prices have shot up in dollar terms, while the rand has weakened against the US dollar, thus helping the platinum producers exceed their average industry costs for the first time in years.
Implats rose 2.23 percent on the JSE yesterday to close at R73.50.