Johannesburg - Sibanye Gold said on Wednesday that it has successfully completed a US $1.05 billion international corporate bond offering, which was approximately two times oversubscribed.
This signals the latest vote of confidence for the takeover of Stillwater Mining Company by the world's third largest platinum producer. Last month, Sibanye completed the acquisition of Stillwater, the United States sole provider of platinum and palladium, for $2.2 billion (about R30 billion), in a bid to create a premier global precious metals miner.
Sibanye said the bonds comprised two tranches of a US $500 million five-year note that will carry a 6.125 percent coupon, and a US $550 million eight-year note that will carry a 7.125 percent coupon. The proceeds of the bond offering, which will settle on 27 June, will be applied to the partial repayment of the bridge loan raised for the acquisition of Stillwater, and follows the successful US $1 billion rights issue which closed earlier this month.
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Sibanye said Citi, HSBC and Barclays acted as global coordinators on the transaction, and were joined by Credit Suisse and Standard Bank as bookrunners. Sibanye chief executive, Neal Froneman, said the significant interest in and support of Sibanye's first corporate bond issuance was heartening, especially following the recent, heavily oversubscribed, US $ 1 billion rights offer.
"The bond offering was approximately two times oversubscribed and closed following a relatively short, two day bookbuild. The support from global investors for Sibanye's equity rights and corporate bond offerings is a significant vote of confidence in the future prospects of Sibanye," Froneman said. "The capital raised through these successful transactions, following the conclusion of the transformative Stillwater acquisition, will ensure an appropriate long-term capital structure for the group."
Meanwhile, Sibanye on Monday secured a two-year wage agreement with the United Steel Workers of America, International Union, the representative union at Stillwater. In terms of the agreement there will be a two percent general wage increase for all job categories effective from June 2, this year to January 1, 2018, with a further one percent increase effective from January 1, 2018 to June 1, 2018. A two percent annual increase will be in effect for the second year of the agreement, from June 2, 2018 to June 1, 2019.
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