Sibanye-Stillwater chief executive Neal Froneman said: ’The strong interest and support of our new bond issuance is a further vote of confidence in the group’s prospects by the capital markets’. (AP Photo/Matthew Brown )
Sibanye-Stillwater chief executive Neal Froneman said: ’The strong interest and support of our new bond issuance is a further vote of confidence in the group’s prospects by the capital markets’. (AP Photo/Matthew Brown )

Sibanye issues R18 billion of new bonds to fund its green metal strategy

By Dineo Faku Time of article published Nov 11, 2021

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JSE- AND NEW YORK-listed Sibanye-Stillwater is selling new bonds worth $1.2 billion (R18bn) partly to fund its ambitious green metal strategy.

The group told investors to expect the settlement on or around next Tuesday.

Commenting on the deal, chief executive Neal Froneman said: “The strong interest and support of our new bond issuance is a further vote of confidence in the group’s prospects by the capital markets”.

Froneman said the bond issuance allows a significant reduction in borrowing rate over extended debt maturities, while maintaining group leverage well below its targeted level of 1x net debt to adjusted earnings before interest, taxes, depreciation and amortisation.

Sibanye said the new bonds comprised two tranches: a $675 million five-year tranche that would carry a 4 percent a year coupon and a $525m eight-year tranche that would carry a 4.5 percent per annum coupon.

“The net proceeds of the new bonds will be used to redeem the 2025 notes, as well as for general corporate purposes, including advancing the group’s green metals strategy through investments and accretive acquisitions to improve earnings diversification,” said Sibanye.

Flush with cash from a rally in the rhodium and palladium Sibanye has joined the push into battery metals.

Last month Sibanye announced a $1bn acquisition of green metal assets comprising full ownership of the Santa Rita nickel one of the largest nickel-cobalt sulphide open pit mines in the world and the Serrote copper mine both in Brazil highlighting the race to supply battery metals to the booming electric-vehicle sector.

Traditionally nickel is used to make stainless steel, and is a key component in lithium-ion batteries which provide portable electricity, powering electronic gadgets such as cellphones, laptops and tablets.

Acquiring the Brazillian assets is in line with the group’s strategy to invest in future focused metals that are essential for the transition to a cleaner future.

Meanwhile, as part of 2021 wage negotiations in the gold sector, Richard Cox, executive vice-president: SA Gold Operations said the group had presented a revised offer, which took into account the fact that the cost of living increased over the past year and would continue to do so over the next three years.

He said the group’s offer was fair and above the inflation rate of 3.6 percent in the past year.

Cox told employees that the above-inflation wage increase would jeopardise the sustainability of our gold operations and directly impact all those stakeholders.

“The gold operations are getting older and deeper and we cannot control the price we get for the gold we produce.

“Our gold operations have to be sustainable so we can generate enough cash so that our gold business can continue to operate for as long as possible, provide you with employment, support communities, pay taxes and royalties to the government and benefit all the other stakeholders.

“An above-inflation wage increase will jeopardise the sustainability of our gold operations and directly impact all those stakeholders that depend on us,” Cox said.

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BUSINESS REPORT ONLINE

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