Sibanye share price drops nearly 14% after raising R1.7bn in share offer

The entrance to the Sibanye-Stillwater mine. (Iavan Pijoos/News24)
The entrance to the Sibanye-Stillwater mine. (Iavan Pijoos/News24)

Sibanye-Stillwater's [JSE:SGL] share price slumped nearly 14% on Wednesday morning, after announcing that it raised approximately R1.7bn through a share offering.

Sibanye on Tuesday evening announced it would place more than 108 million new ordinary shares on offer, to bolster its balance sheet.

Shares were oversubscribed, at a price of R15.50 per share. The shares were placed with existing and new institutional investors, Sibanye said.

However, the share price which opened at R15.70 on Wednesday morning was trading 13.94% lower at R14.63 by 10:30.

Neal Froneman, CEO of Sibanye-Stillwater said in a shareholder notice on Wednesday morning that the oversubscription of the transaction was a "testament" to the strong market support for the company.

"While we remain confident that the current operating and economic conditions will support our deleveraging plans during the course of the year, the enhanced balance sheet flexibility provided by this transaction, will ensure that the company is appropriately positioned and sufficiently robust to endure any exogenous socio-economic challenges," he said of the offering.

Sibanye will make an application to the JSE for the listing of the shares. The listing is expected to take place on or around April 15, 2019, Sibanye said.

"Dealings in the placing shares are expected to commence at the same time.

"The placing is conditional upon, among other things - admission of the placing shares on the JSE becoming effective and the placing agreement between the company and the manager not being terminated in accordance with its terms prior to admission," the shareholder notice read.

Following admission the company’s issued share capital will comprise more than R2.3bn ordinary shares. 

As part of the terms of the placing agreement, Sibanye has agreed to a lock-up arrangement for a period of 120 days from April 9, 2019.

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