PPC, THE CEMENTITIOUS products group, has opted not to do a capital raise following the successful refinancing of debt and near conclusion of its restructuring, chief executive Roland van Wijnen said yesterday.
PPC previously said it would defer an equity capital raise to de-gear its South African balance sheet until the end of September, and that it might review this should the South African businesses continue to de-gear towards a more sustainable debt level.
The capital raise decision was also subject to completion of the R515 million disposal of PPC Lime by October 31, but conditions for this sale were finalised on September 17 and the closing date was expected about 10 business days thereafter.
The new debt facilities of R2.1 billion have an extended maturity profile with the long-term facility of R1.5bn being repayable over three to five years. The margins were reduced across all facilities to reflect PPC’s improved credit risk profile.
“The organisation is now in calmer seas after a hectic 18 months, including the Covid-19 pandemic, and the organisation is now focused, and ready to help the economy to grow by playing its part in the country’s infrastructure development programme,” Van Wijnen said in a telephone interview.
The group would use the new debt to re-finance the drawn portions of existing facilities, leaving headroom and financial flexibility over the next five years,” he said.
A capital restructuring in March in the Democratic Republic of Congo operations had terminated PPC’s obligations to make further deficiency funding to PPC Barnett in the country.
The restructuring of PPC Barnett’s balance sheet, originally anticipated to be concluded by September 30, would only be effective by mid-December due to administrative processes to restructure the balance sheet, to restore solvency.
PPC said it expected sales volumes in South Africa and Botswana for the six months to September 30 to increase 10 percent to 13 percent year-on-year, with double-digit volume growth in most business units.
Relative to the comparable period in 2019, total cement sales were expected to increase by 6 percent to 9 percent.
BUSINESS REPORT